China Shares Rally, Led by Tech Stocks, as Investors Move Beyond AI Risk Debate

China's major stock indexes rallied on Friday, posting gains for the week, on newly released Chinese plans for five-year development of electronic information manufacturing and the pharma industry, Nvidia Chief Jensen Huang's optimistic outlook on 2027 chip sales and domestic increases in silicon wafer prices.

The benchmark Shanghai Composite Index closed up 0.9 percent on Friday for a weekly gain of 0.6 percent. Shanghai's Nasdaq-style STAR Market added 6.4 percent for the week.

The Shenzhen Component Index rose 1.7 percent on Friday for a weekly gain of 1.3 percent, and its tech-heavy ChiNext Index rose 2.25 percent, closing the week 1.5 percent higher. Market volume on Chinese mainland exchanges on Friday totaled 2.1 trillion yuan (US$312.5 billion), up 256.4 billion yuan from the previous session, with more than 4,200 stocks advancing.

All the markets fell on Monday amid a contentious global debate about the risks associated with frontier AI development, triggered by an Anthropic researcher who quit with a warning that superintelligence could develop to the point where it could exterminate human life within a decade. Canadian computer scientist Yoshua Bengio, considered one of the "godfathers" of AI technology, said this week concerns over AI safety are reaching a point where governments realize they must act to protect the public.

"The debate may continue, but nobody can deny the fast-strengthening power of AI and the positive outlook for AI-related companies," said Dai Qing, an analyst with Changjiang Securities, who noted a rebound in tech shares by the end of the week.

Investment in AI by Chinese companies is forecast to reach about 600 billion yuan this year, according to a new report from the China Telecom Research Institute. China's consumption of tokens, or the units that AI models use to process text and are used to determine user billing credits, is forecast to reach 100 quadrillion this year and surpass 35 quintillion by 2030, the report said. A quadrillion is equal to one thousand trillion.

Shanghai-listed chipmaker CXMT rose 4 percent on Friday after the world's fourth-largest maker of dynamic random-access memory said it is preparing to enter the NAND flash memory market. The move marks a significant expansion beyond CXMT's core business, pitting the Hefei-based company against domestic rival Yangtze Memory Technologies and overseas giants such as Samsung Electronics.

Shares in Chinese industrial equipment maker Shengu Group skyrocketed more than 12-fold in just two trading sessions after its Shanghai debut, climbing from an IPO price of 4.39 yuan to 57.77 yuan. The Shanghai Stock Exchange on Friday said that some investors were exhibiting abnormal trading behavior in the stock and could be subject to account suspensions.

The China Securities Regulatory Commission announced on Friday that it plans to reward whistleblowers who provided leads in 17 cases that spanned disclosure violations, insider trading, private fund irregularities and illegal securities operations. Companies involved included Yuanda Intellectual Industry Group, Guannong and Weiming Biomedical. The new rules raise the reward ratio to up to 3 percent of imposed fines, with a per-case cap of 1 million yuan.

Hong Kong's Hang Seng index closed 0.6 percent higher on Friday but slipped 0.2 percent for the week. Its tech index gained 2 percent for the week. In trading of Chinese mainland shares on Friday, MiniMax soared nearly 19 percent, Lenovo jumped 9.5 percent to a record high, and Semiconductor Manufacturing International and Hua Hong Semiconductor each climbed more than 4 percent. Alibaba gained nearly 4 percent after unveiling its next-generation AI model Qwen3.8-Omni-Flash and separately publishing news of the development of an AI model that can identify nearly 150 abdominal conditions, such as stomach and liver cancers, potentially replacing models that typically target a single disease.

Shares in Trip.com, China's largest online travel platform, ended up 0.8 percent on Friday after wobbles earlier in the week after the company reported a second-quarter loss of 2.5 billion yuan, citing the 5.2 billion yuan fine from Chinese anti-monopoly regulators.

Across Asia, Japan's Nikkei jumped 1.6 percent for the week and South Korea's Kospi lost 0.23 percent. Both markets rebounded strongly on Friday.

On Wall Street, the Dow Jones Average posted its third straight weekly loss, sliding 1.7 percent for its worst performance since March. The S&P 500 was off about 0.1 percent, and the tech-heavy Nasdaq posted a gain of 0.7 percent. US markets initially dropped but later rebounded after the US Federal Reserve raise its key interest rate a quarter point, the first increase in three years. US Treasury yields weighed on markets this week, with the benchmark 10-year yield breaching 5 percent for the first time since July 2007. Oil prices remained above US$100 a barrel amid Middle East uncertainty, with global benchmark Brent crude futures ending the week at US$103.87 a barrel. In Europe, the Stoxx600 index lost 1 percent on Friday.