SHANGHAI: China’s blue-chip index slipped more than 2percent to a 1-year low on Monday as optimism over the US-China summit faded, leaving investors focused on deepening economic imbalances and fresh geopolitical risks.
Technology shares slumped after the US moved toward restricting the use of Chinese-made components used in AI data centres, dampening an already thin risk appetite ahead of a week-long holiday from October 1. The large-cap CSI300 Index lost 2.2percent by the lunch break, on track for the worst showing in five weeks, and touching its lowest point since early September 2025.
The Shanghai Composite Index declined 1.7percent. Stocks in Hong Kong, where the market will be open during much of China’s Golden Week holiday, rose 0.6percent.
China said on Monday a two-month extension of a trade truce with the United States would provide space for both sides to evaluate the implementation of their arrangement to resolve economic and trade issues. The extension was one of the key takeaways from the meeting last week between China President Xi Jinping and US President Donald Trump.
Despite the optics of the leadership summit, “the US and China remain divided across technology, security, trade and the broader architecture of international governance,” OCBC Bank said in a note. Reflecting such divisions, a bipartisan group of US lawmakers introduced legislation on Friday to bar the federal government from equipping sensitive government systems with Chinese-made components used to transmit data in AI data centres.
The news weighed on Chinese makers of optical transceivers such as Eoptolink Technology and Innolight Technology. Eoptolink tumbled 7percent in Shenzhen while Innolight shares slumped roughly 9percent in both Shenzhen and Hong Kong.
China’s CSI 300 Telecommunication Services Index slumped more than 6percent to a two-month low. Sentiment was further weighed down by data showing China’s industrial profit growth slowed in August, highlighting deepening economic imbalances.