Markets · · 2 min read
Editor: Bohdan S.
China’s CSI 300 enters a bear market, down 20% from its June peak
China's main share index has now lost a fifth of its value since June, as a tech sell-off, AI doubts and oil above $100 dragged stocks lower across Asia.
The short answer
China's CSI 300 index, a gauge of the 300 biggest companies listed in Shanghai and Shenzhen, fell on Thursday to a level 20% below its June high, the usual line for a bear market. The index has dropped for 10 weeks running. Stocks across Asia also slid as tech shares sank and crude oil climbed.
What happened
The CSI 300 lost ground again on Thursday, leaving it 20% under the high it reached in June. CNBC put the day's decline at more than 1%, while CoinDesk reported a slide of about 2%. Data from LSEG cited by CNBC show 10 straight weekly losses and a 2.6% drop so far this week. The selling spread across the region: according to CoinDesk, Hong Kong's Hang Seng and Japan's Nikkei 225 each lost around 3%, South Korea's Kospi fell 3.5% and Taiwan's benchmark gave up 2%. Brent crude rose past $112 a barrel and WTI crude topped $100, the highest since May.
What it means
A bear market is the label investors use when an index falls at least 20% from a recent peak. It is a milestone rather than a turning point, but it signals that the slide has moved beyond a short pullback. For the CSI 300, the losses have built up slowly over ten weeks rather than in one crash, which points to a steady drain of confidence.
Technology shares led the latest leg down. Hong Kong-listed Chinese tech stocks had their worst session since the April 2025 tariff shock, according to Bloomberg's David Ingles as cited by CoinDesk, and he said the tech benchmark is now more than 40% below its peak, trading at roughly 13 times expected earnings. Mixed third-quarter results from US companies have added to doubts about the payoff from heavy spending on artificial intelligence, and rising oil prices have piled on extra pressure.
Analysts quoted by CNBC also point to deeper, home-grown problems. Jordan Cvetanovski of Pella Funds said China is still dealing with years of overbuilt capacity and overinvestment. Fierce competition has squeezed company margins, and industrial profit growth in September was the weakest of the year. A long property slump and soft consumer spending add to the strain.
The makeup of China's market can make swings bigger. According to HSBC data cited by CNBC, individual investors account for about 90% of daily trading in China, compared with roughly 20% to 25% on the New York Stock Exchange. Shaun Rein of China Market Research Group said retail investors tend to sell quickly when uncertainty rises and are shifting toward safer options such as time deposits. Still, he argued the sell-off has gone too far, calling it "a crisis of confidence right now not a crisis in the economy."
The bull case
After a 20% fall, Chinese shares are cheaper, and tech stocks trade at about 13 times forward earnings by one estimate. Rein pointed to resilient exports and early signs of recovering home prices in the largest cities, and expects a strong rebound in 2027. State Street's Daniel Gerard said China's growing AI capabilities could eventually pull global investors back, even before company profits improve.
The bear case
Ten weeks of losses show the selling has momentum, and Rein expects more pressure from geopolitical uncertainty, AI bubble worries and weak consumer confidence. Overcapacity and price wars are hurting profits, and the property slump continues. With oil above $100 and a market dominated by fast-moving retail traders, further falls could feed on themselves before any recovery takes hold.
Why it matters
For investors
Funds that track mainland Chinese and Hong Kong shares, especially tech-heavy ones, are most exposed, while higher oil prices and a broad Asian sell-off could weigh on risk assets such as bitcoin, which slipped toward $82,000.
The wider context
For savers with emerging-market or global funds that hold Chinese shares, a slump this long can weigh on returns, though a bear market label says nothing about when a decline will end.
Market impact
| Asset (ticker) | Possible move | Timeframe | Why |
|---|---|---|---|
| Xtrackers Harvest CSI 300 China A-Shares ETF (ASHR) | ↓ Down | Short term | The index it tracks has fallen 20% from June and lost ground for 10 weeks. |
| KraneShares CSI China Internet ETF (KWEB) | ↓ Down | Short term | Hong Kong-listed Chinese tech shares had their worst day since April 2025. |
| Brent crude oil (BZ=F) | ↑ Up | Short term | Brent rose above $112 a barrel, its highest level since May. |
| Bitcoin (BTC/USD) | ↓ Down | Short term | Bitcoin slipped toward $82,000 as risk appetite faded across Asian markets. |
The FinPrism newsroom's view of how these figures could move, as of . It is general news commentary, not a recommendation to buy, sell or hold anything.
Frequently asked questions
Why are Chinese stocks falling?
The CSI 300 has dropped for 10 weeks as investors worry about weak company profits, overcapacity, a long property slump and soft consumer demand. This week, a sharp tech sell-off, doubts about artificial intelligence spending after mixed US earnings, and oil prices above $100 a barrel added to the pressure.
What is the CSI 300 index?
The CSI 300 tracks 300 of the largest companies listed on the Shanghai and Shenzhen stock exchanges. It is widely used as the main benchmark for mainland Chinese shares, so a 20% drop from its June peak means China's broad stock market is officially in bear territory.
What does a bear market mean for investors?
A bear market means an index has fallen at least 20% from a recent high. It shows that selling has become sustained rather than a brief dip. It does not say when the decline will end; some analysts expect more pressure, while others think China's sell-off has gone too far.
How this was made: written with AI assistance from the sources listed above, following our editorial standards.
