Chinese Tech Sector Decouples from Economy with Double-Digit Rally

Shanghai, Sunday, 18 January 2026.
China’s technology sector is defying the nation’s broader economic stagnation, staging a remarkable rally in early 2026. Nearly a year after DeepSeek’s artificial intelligence breakthrough disrupted global markets, capital is aggressively flowing into domestic innovation, including commercial rocketry and robotics. While the general economy grapples with deflation and a property crisis, the onshore tech gauge has surged almost 13% this month alone, significantly outperforming the Nasdaq 100. This divergence signals a critical shift: investors are betting that technological self-reliance will drive future growth, effectively decoupling high-tech valuations from the persistent malaise weighing down the world’s second-largest economy. Bolstered by strong earnings from regional players like TSMC, this sector-specific boom highlights how innovation remains a potent magnet for capital, even as structural challenges persist.