China’s CSI 300 Enters a Bear Market After a 10-Week Rout

China’s CSI 300 index fell as much as 1.7 percent on Thursday and entered a bear market, 20 percent below its June high. The gauge of 300 large Shanghai and Shenzhen stocks has now fallen for 10 straight weeks, the longest weekly losing streak since it launched in 2005, and LSEG data put it 2.6 percent lower in the week through Thursday.

The slide kept going after official growth for the third quarter came in at 4.5 percent, inside Beijing’s full-year target. Households, who account for 90 percent of daily mainland trading, have been pulling risk back into time deposits.

The Longest Weekly Losing Streak Since 2005

Broker Motilal Oswal said the 10-week run is the longest weekly losing streak since the CSI 300 began, a record that matches Barchart’s read of China’s main benchmarks. China Securities Index Company has calculated the gauge since April 8, 2005, from a base of 1,000 set on December 31, 2004.

The index closed Wednesday at 4,111.93 points, down 0.97 percent, its weakest close in 14 months. It is down 11.19 percent in 2026, 9.42 percent over one month and 13.24 percent over three months, and it remains 16.56 percent below where it stood five years ago. A gauge of large Chinese firms listed in Hong Kong dropped as much as 3 percent on Thursday.

THE CSI 300 ON THURSDAY

• From the peak: Down 20 percent from the June 2026 high of 5,059.66.
• Weekly streak: Ten straight weeks of losses, the longest since 2005.
• This week’s tape: Down 2.6 percent in the week through Thursday, per LSEG.
• Thursday’s drop: As much as 1.7 percent, the move that crossed the 20 percent line.

Wednesday’s close already sat 18.7 percent under that June high. The extra selling on Thursday was enough to take the drawdown through the conventional 20 percent mark that traders treat as a bear market.

Growth Held 4.5 Percent as Stocks Kept Falling

The National Bureau of Statistics said the economy grew 4.5 percent in the third quarter from a year earlier, after 4.3 percent in the second quarter and 5.0 percent in the first. Output in the first nine months reached 107,107.1 billion yuan (about $15.94 trillion), up 4.6 percent, inside the 4.5 to 5.0 percent full-year target. Quarter on quarter, third-quarter GDP rose 1.2 percent.

NBS deputy head Mao Shengyong said the nine-month expansion added 5.7 trillion yuan of output, the largest rise for that stretch in five years. He also said new drivers contributed over 40 percent of growth, led by advanced manufacturing, the digital economy and modern services.

The industrial side still expanded. Value added of industrial firms above designated size rose 5.3 percent in the first nine months and 5.5 percent in September. Equipment manufacturing was up 10.2 percent and high-tech manufacturing 14.3 percent. Output of industrial robots, lithium-ion batteries and 3D printing equipment jumped 29.1 percent, 39.5 percent and 62.5 percent. Exports rose 16.4 percent in the first nine months and 29.6 percent in September.

The soft patches are at home. Retail sales of consumer goods rose only 1.1 percent in the first nine months and 1.1 percent in September. Fixed-asset investment fell 7.2 percent. Real estate development investment dropped 20.6 percent. Floor space of newly built commercial buildings sold fell 13.2 percent, and those sales were worth 5,379.9 billion yuan, down 13.9 percent. Online second-hand housing transactions rose 10.7 percent. Urban surveyed unemployment was 5.2 percent in September. Profits at industrial firms above designated size were 5,272.0 billion yuan in the first eight months, up 15.7 percent, even as listed firms keep warning that price wars are chewing through margins.

Households Put Fresh Savings Back Into Time Deposits

HSBC data put retail investors at 90 percent of daily mainland turnover, against about 20 to 25 percent on the New York Stock Exchange. That mix turns a confidence shock into a long slide, because households can leave faster than institutions, and they have somewhere else to park the cash.

People’s Bank of China figures released on October 14 show the shift of savings into investment products cooled in September. M2, the broad money supply, was 359.63 trillion yuan at the end of September, up 7.2 percent. M1 rose 3.2 percent to 116.76 trillion yuan. The gap between the two widened to 4 percentage points from 3.4 points in August.

WHERE THE HOUSEHOLD CASH WENT

• Bank deposits: Household deposits rose 9.39 trillion yuan in the first nine months, against 12.73 trillion yuan a year earlier.
• Time deposits: Household demand deposits grew 696 billion yuan less than a year earlier, while time deposits and other deposits grew 136 billion yuan more, per Zhong Linnan at GF Securities.
• Loans: Household loans fell 1.03 trillion yuan in the first nine months, a net paydown rather than a fresh bid for assets.
• Non-bank pots: Deposits at non-bank institutions were 1.91 trillion yuan lower than a year earlier in September, even after a 4.41 trillion yuan rise over nine months.

Zhong said households cut or redeemed equities and steered more income into debt repayment and safer assets. Lin Yingqi, a banking analyst at China International Capital Corporation, read the same PBOC print as a cooling in deposit migration amid market swings. A Goldman Sachs report in June put property at 52 percent of household assets in the first quarter of 2026, down from 67 percent in mid-2021, with cash and bank deposits up to 25 percent from 16 percent.

Shaun Rein, managing director at China Market Research Group, said the motive is wealth preservation, with investors favouring time deposits while property and jobs feel weak. That is the mechanical problem for any bounce: the buyers who make 90 percent of the tape are the same people now choosing a 1 percent deposit over a stock that has already fallen for 10 weeks.

MetaX, Moore Threads and the AI Unwind

Local shares have been sliding since late June, first on a global selloff in AI-linked names and then on weak consumption prints and thin earnings. The same stocks that powered the spring rally are now doing the damage.

WHERE THE LOSSES CLUSTERED

• STAR 50: Down nearly 40 percent in the current half-year, among the weakest tech gauges in the region.
• ChiNext: Down about 36 percent, with the hardware-heavy board taking the brunt of the unwind.
• Chip names: MetaX and Moore Threads have each lost around half their value from their peaks, per Motilal Oswal.
• Hong Kong tech: Hang Seng Tech fell to its weakest level since September 2024, when Beijing last rolled out a large market support package.

Jordan Cvetanovski, chairman and chief investment officer at Pella Funds, said China is still trying to rein in an old overbuild of capacity, including in industries that look strong on paper. “I think China is really struggling with reining in the problems that they’ve had in the past from the overbuild of capacity and other things,” Cvetanovski said, adding that he still sees selected chances in batteries.

That is the awkward split on the tape. Factory output of lithium batteries is up 39.5 percent, and high-tech manufacturing is up 14.3 percent. The stocks tied to those same industries are the ones investors have been dumping for 10 weeks.

Why CATL’s Profit Miss Hit the Index

Contemporary Amperex Technology Co., the world’s largest electric-vehicle battery maker, gave the blue-chip index its sharpest single-name jolt of the week. A Shenzhen filing on Tuesday showed third-quarter net profit of 21.25 billion yuan, up 14.5 percent from a year earlier and down 5.8 percent from the prior quarter. Analysts had been looking for growth of about 41.2 percent. Revenue rose 58.6 percent to 165.22 billion yuan.

Shenzhen-listed shares fell 12 percent on Wednesday. Hong Kong stock dropped more than 10 percent, to its lowest close since July 2025. Quarterly gross margin slipped to 20.69 percent. CATL said unit profit was hit by a richer mix of lower-margin energy-storage products, a 2 percent consumption tax on lithium-ion batteries that resumed on September 1, and smaller export tax rebates. Its share of China’s power-battery installations fell to 40.9 percent in September from 49.8 percent in January. Global usage share in the first eight months was 39.4 percent.

CATL is not a small satellite of the CSI 300. It is the national champion in a sector Beijing still treats as strategic, and it just told the market that more sales no longer mean fatter earnings. For a retail-heavy index that had already been selling AI hardware for weeks, that miss landed as confirmation that even the winners of China’s new industries can miss by a mile on profit.

The $188 Billion Huijin Has Not Spent

Authorities have been trying to cap the selling. Central Huijin Investment Co., the state investor that leads mainland market support, raised $231 billion by selling ETFs in the first half and has redeployed $43 billion since purchases resumed in July, leaving about $188 billion unspent, according to estimates from analysts including Rebecca Sin. State-backed funds spent about $15 billion between October 9 and October 20, slower than the July 2026 rescue during the technology selloff.

Capacity is not the constraint. Willingness is. At the recent pace, the unused sum would cover many more sessions, but a cautious bid does not offset a 90 percent retail market that has already moved back into time deposits. Foreign desks were already light, so the 20 percent line can force systematic funds to cut just as local buyers step away, thinning the bid when it is needed most.

WHERE EXPERTS DISAGREE

• Structural camp: Cvetanovski says the market is still digesting years of extra plant and price wars, even in globally competitive industries such as batteries.
• Confidence camp: Rein says exports are holding and large-city property prices are showing signs of life, so the selloff has gone too far relative to the economy.
• AI camp: Daniel Gerard, senior multi-asset strategist at State Street Markets, says China’s growing AI capacity could pull global money back into the stocks before corporate earnings turn.

Rein still expects more near-term selling from geopolitics, worries about an AI bubble, and weak consumer mood. He also argues that a market this retail-heavy will keep swinging hard, because individuals exit faster than institutions when the story sours.

Earlier CSI 300 Bears Cut Far Deeper

A 20 percent drop is the textbook line, not the historical floor for this index. Earlier CSI 300 bears, measured peak to trough, ran deeper and, in several cases, much longer than 10 weeks.

FIVE EARLIER CSI 300 BEARS

Those five episodes averaged a 47.5 percent drop and 649 days. The shallowest of them, 2018, still cut 30.7 percent. The CSI 300 then gained 14.68 percent in 2024 and 17.66 percent in 2025 before this year’s fade. The 2021-24 cycle was the long grind through property stress and regulatory shocks; this one is shorter so far and is being driven more by an AI unwind and a household retreat into deposits than by a fresh collapse in official GDP.

It’s a crisis of confidence right now not a crisis in the economy.

Shaun Rein, managing director, China Market Research Group

Rein is forecasting a strong rebound in Chinese stocks in 2027. Gerard’s version is that AI capability, not a quick profit recovery, is what could bring global buyers back. Thursday’s tape did not settle that argument. It only confirmed that a 10-week losing streak and a 20 percent drawdown can arrive while the official growth rate is still 4.5 percent and still inside the target.

Disclaimer: This article is news reporting and market analysis for information only. It is not investment advice, a recommendation to buy or sell any index, stock, fund or deposit product, or a forecast you should trade on. Readers should consult a licensed financial adviser or investment professional who understands their objectives and risk limits before making any decision about Chinese equities, mainland deposits or related funds. Index levels, growth rates, profit figures and policy actions reflect the cited official and market sources as of October 22, 2026, and can change in the next session.