some context, first of all, the -40% collapse only brought the STAR50 index back to its March 2026 levels.

and the Chinese stock market is heavily moderated by the government which is very different from the US market. if the stock rallies too quickly, the government generally speaking will try to slow it down. Sometimes through explicit policies 1, sometimes through a kind of "scare tactic" 2. Conversely, when the stock drops too sharply, the government also intervenes to prop it up 3. Honestly I feel more countries should do the same.

The Chinese stock market is also much smaller relative to its GDP (101.5%) compared to the US (227%) 4. All this is to say, if you look at China and think, "huh, their AI bubble burst and they still seem to be fine?", think again. If and when the AI bubble bursts for the US, it's going to be much much worse.