China Tech & Economy — 2026-05-25

Top Stories (at least 3)

Nvidia CEO Confirms $200B CPU Market Forecast Includes China

• What happened: Nvidia CEO Jensen Huang, speaking to investors, explicitly stated that the company's forecast for a $200 billion CPU market includes China — a deliberate reassurance aimed at calming concerns about geopolitical exposure and the impact of U.S. export controls on the chipmaker's growth trajectory.
• Why it matters: The statement signals that Nvidia remains committed to its China market strategy and expects Chinese demand for advanced computing — from AI infrastructure to EVs — to be a meaningful portion of future revenues, even as regulatory pressures intensify.
• Key numbers: $200 billion total CPU market forecast; Nvidia stock has been a focal point amid U.S.-China chip war tensions.

1 sources

reuters.com

Nvidia says its forecast for $200 billion CPU market includes China | Reuters

Shanghai Composite Holds 33% Below 2007 Peak Despite Record GDP

• What happened: Despite China's GDP reportedly reaching approximately 140 trillion yuan ($20 trillion) and the country logging record trade surpluses, the Shanghai Composite Index remains roughly 33% below its 2007 peak — one of the most glaring disconnects between economic output and equity market performance among major economies.
• Why it matters: The divergence highlights deep structural issues in China's capital markets, including weak retail investor confidence, limited domestic consumption recovery, and ongoing property sector drag — all of which make macro-to-equity translation unreliable for foreign portfolio investors.
• Key numbers: Shanghai Composite ~33% below 2007 peak; GDP 140 trillion yuan ($20 trillion); record trade surplus in 2026.

China's Semiconductor Firms Post Hefty 2025 Profits Amid AI Boom and Self-Reliance Push

• What happened: Domestic A-share semiconductor companies in China are forecast to have achieved substantial profit growth in their 2025 results, according to Donghai Securities, driven by surging demand for AI chips and the government's push for technology self-reliance amid ongoing U.S. export controls.
• Why it matters: Strong 2025 earnings provide momentum heading into 2026, reinforcing the thesis that domestic chip substitution and AI infrastructure buildout are creating durable revenue streams for Chinese semiconductor players even as they remain locked out of the most advanced node equipment.
• Key numbers: "Hefty" profit growth for domestic A-share semiconductor sector in 2025 (Donghai Securities forecast); driven by AI and self-reliance tailwinds.

3 sources

scmp.com

China’s chip leaders bank on AI, EVs, RISC-V as industry’s future growth engines | South China Morni

scmp.com

China’s tech giants set to lead AI growth in 2026 despite chip shortage: JPMorgan | South China Morn

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China Future Tech | South China Morning Post

China Likely to Hold ~5% GDP Growth Target in 2026 to Fight Deflation

• What happened: Chinese government advisers and analysts report that Beijing will likely maintain its "around 5%" annual GDP growth target for 2026, requiring sustained fiscal and monetary stimulus to combat deflationary pressures that have persisted through 2025.
• Why it matters: The commitment to a high growth target keeps the door open for additional fiscal spending and PBOC easing, which would support risk assets and domestic demand — but also raises questions about debt sustainability and the effectiveness of supply-side stimulus in a demand-constrained economy.
• Key numbers: ~5% GDP growth target for 2026; deflation battle ongoing; fiscal and monetary spigots to remain open.

China's Tech Giants Set to Lead AI Growth in 2026 Despite Chip Shortage — JPMorgan

• What happened: JPMorgan's Asia-Pacific TMT equity research co-head Alex Yao flagged that China's major tech companies are positioned to lead AI growth in 2026, even in the absence of clear AI monetisation evidence and despite ongoing chip supply constraints stemming from U.S. export restrictions.
• Why it matters: The bullish stance from a top-tier Wall Street institution — emphasising user adoption of AI features as the key 2026 theme — provides a fundamental underpinning for China tech valuations even as macro headwinds persist.
• Key numbers: JPMorgan identifies "sustained user adoption" as the key AI theme; chip shortage noted but not seen as a growth-stopper for top-tier internet and tech platforms.

Tech & Innovation Spotlight (at least 3 items)

China Semiconductor Industry: AI and EVs as Future Growth Engines

• Update: At an annual gathering in Shanghai, veteran chip industry executives confirmed that AI applications and electric vehicles represent the two most important demand drivers for China's domestic semiconductor sector going forward, with RISC-V architecture also highlighted as a strategic platform for homegrown chip design.
• Context: This aligns with the broader self-reliance strategy Beijing has been executing since 2019, with the AI chip gap vs. Nvidia's H100/H200/B-series being partially bridged by domestic players leveraging open-standard RISC-V and volume scaling. EV semiconductor content per vehicle continues to rise sharply.
• Numbers to know: China's EV market is the world's largest; domestic chip content per EV estimated at $400–600 per unit and rising; RISC-V ecosystem growing rapidly with government backing.

3 sources

scmp.com

China’s chip leaders bank on AI, EVs, RISC-V as industry’s future growth engines | South China Morni

scmp.com

China’s tech giants set to lead AI growth in 2026 despite chip shortage: JPMorgan | South China Morn

scmp.com

China Future Tech | South China Morning Post

China's Three Telecom Giants Race Into the AI Token Economy

• Update: China's three major state-owned telecom operators — China Mobile, China Unicom, and China Telecom — are actively competing to embed themselves in the AI "token economy," building proprietary large language model (LLM) infrastructure and AI service platforms to capture enterprise AI revenue.
• Context: The telecoms' AI pivot represents a structural shift from pure connectivity revenue toward cloud-AI hybrid services, putting them in direct competition with Alibaba Cloud, Huawei Cloud, and ByteDance's Volcano Engine. Their scale advantage in enterprise relationships and 5G infrastructure gives them a credible entry point.
• Numbers to know: Three carriers combined serve hundreds of millions of enterprise and consumer accounts; China Mobile alone has the world's largest subscriber base at ~1 billion.

China's 15th Five-Year Plan Targets Futuristic Tech by 2030

• Update: China's 15th Five-Year Plan explicitly names flying taxis, fusion power, quantum computing, and brain-computer interfaces as priority technology targets for the 2026–2030 period, with government funding and regulatory frameworks being developed to accelerate commercialisation.
• Context: The ambition of the tech roadmap signals that Beijing is willing to fund moonshot categories, not just incremental AI and semiconductor improvements. For global operators, this creates procurement and partnership opportunities — but also intensifies the competitive race in categories previously dominated by U.S. and European deeptech firms.
• Numbers to know: 15th Five-Year Plan covers 2026–2030; six priority futuristic technology categories identified; fiscal backing expected to be substantial.

Economy & Markets Pulse

• Macro print of the day: China's GDP is expected to have reached approximately 140 trillion yuan (~$20 trillion) for 2025, with defence and science & technology reaching new output levels per President Xi Jinping's New Year address. The 2026 growth target is being maintained at "around 5%" by advisers, requiring continued stimulus to break the deflationary trend.

• PBOC / policy: Beijing has signalled it will rely more heavily on fiscal stimulus in 2026 to manage economic deceleration, with the Central Economic Work Conference acknowledging "prominent" internal imbalances. Monetary policy remains accommodative with the PBOC expected to keep easing options open. China's 2026 Government Work Report (Premier Li Qiang) set a 4.5–5% GDP growth target.

• FX & rates: The yuan (CNY) has experienced pressure against the USD in recent months. No fresh intraday data confirmed for May 25; monitor onshore (CNY) and offshore (CNH) spreads closely. The PBOC's willingness to use the daily fixing to manage depreciation pressure remains a key tactical variable.

• Equities: The Shanghai Composite remains approximately 33% below its 2007 peak despite record GDP — a persistent structural discount. Hong Kong IPO markets have been described as booming in recent months (CNBC noted a surge in May 2026), and the Hang Seng has seen foreign inflows recover after brief Iran-war-related outflows in mid-May. Specific daily moves unavailable from verified sources for May 25.

• Commodities & trade: China's record trade surplus continues to be a geopolitical flashpoint. The EU has warned companies to diversify supply chains from China faster (Bloomberg, May 22). China also restricted chemical exports to the U.S. in a fentanyl-related crackdown (Bloomberg, May 22). Lithium, copper, and rare earth pricing remain strategically sensitive given China's dominant processing position and the 15th Five-Year Plan's emphasis on critical materials sovereignty.

Big Tech Scoreboard (today's movers)

Policy & Regulation

EU Supply Chain Warning Intensifies Pressure on China Tech Operators The European Union has warned companies to diversify supply chains away from China faster, adding urgency to the ongoing "China+1" manufacturing strategy debate. This regulatory signal from Brussels increases costs for multinationals still heavily exposed to Chinese manufacturing and raises the stakes for China's own domestic substitution push in semiconductors and advanced materials.

China Restricts Chemical Exports to U.S. in Fentanyl Crackdown China has moved to restrict certain chemical exports to the United States as part of a fentanyl-related enforcement action. While framed as a law enforcement measure, the move adds another layer of friction to U.S.-China trade relations and underscores how non-tech policy actions can carry tech-supply-chain implications (chemical precursors overlap with semiconductor manufacturing materials).

China's 15th Five-Year Plan Establishes Regulatory Roadmap for Emerging Tech Beyond setting growth targets, the 15th FYP is developing regulatory frameworks for flying taxis, quantum computing, fusion power, and brain-computer interfaces — categories where Chinese regulators may move faster than Western counterparts. For global operators, this creates first-mover regulatory certainty risks and opportunities in China, particularly for joint ventures in early-stage deeptech.

What This Means

• For global tech operators: Nvidia's explicit inclusion of China in its $200B CPU forecast signals the company is not retreating from the market despite export controls — operators supplying into China's AI infrastructure buildout should expect continued demand, but must navigate a bifurcating supply chain where domestic Chinese alternatives (Huawei Ascend, Biren, Cambricon) are closing the gap. The EU supply chain warning reinforces that Western boards will face increasing pressure to reduce China concentration.

• For investors: The JPMorgan call on China tech AI adoption as the key 2026 theme, combined with strong 2025 semiconductor earnings, supports a selective overweight in China tech — particularly AI-adjacent internet platforms (Tencent, Alibaba) and domestic semis (SMIC, NAURA, Will Semi). However, the Shanghai Composite's stubborn 33% discount to its 2007 peak warns against broad index exposure; alpha generation requires stock selection, not beta bets.

• For the China-US tech contest: Nvidia's China commitment and domestic semiconductor profit growth tell a nuanced story — U.S. export controls have slowed but not stopped China's AI chip ecosystem development. The RISC-V push, EV semiconductor demand, and 15th FYP deeptech funding collectively suggest China is building an increasingly self-sufficient, if not leading, tech stack. The $200B CPU market confirmation from Nvidia also implies that the two ecosystems remain commercially intertwined even as they strategically diverge.

What to Watch Next (next 24–72h)

• Nvidia earnings / guidance updates (ongoing): Watch for any follow-up analyst briefings or revised guidance commentary on China revenue mix following Jensen Huang's $200B CPU market remarks. Any quantification of China's share would be a market-moving event.

• PBOC monetary policy signals: With China targeting ~5% GDP growth and fighting deflation, any hint of an RRR cut, rate adjustment, or targeted lending facility announcement from the PBOC in the coming days would move CNY, Chinese government bonds, and A-share financials.

• Hong Kong IPO pipeline: Given CNBC's May 2026 reporting on a booming HK IPO market, watch for any major tech listings or prospectus filings from Chinese unicorns — particularly in AI, EV, or biotech — which would be a sentiment indicator for risk appetite in the region.

Reader Action Items

• Review Nvidia China exposure disclosures: Given Jensen Huang's explicit confirmation of China in the $200B CPU forecast, investors and operators should model out scenario analysis for what percentage of Nvidia's CPU/GPU revenue comes from or depends on China — and stress-test those estimates against escalation risk in U.S.-China export control policy. The Reuters report is the starting point: []

• Add domestic China semiconductor names to watchlist: Donghai Securities' forecast of "hefty" 2025 profit growth for A-share semis, combined with the AI + EV demand structural thesis confirmed at the Shanghai chip summit, makes this a high-conviction sector to monitor. Focus on SMIC (0981.HK), Will Semi, and NAURA Technology as key proxies — and track whether the 15th FYP deeptech funding translates into procurement contracts.

1 sources

reuters.com

Nvidia says its forecast for $200 billion CPU market includes China | Reuters