China’s Smart Economy Push Lifts Tech, AI Stocks

China's smart economy strategy is driving growth in tech and AI stocks, according to analysts and news outlets. Several financial institutions and companies are focusing on domestic AI strategy while emerging AI firms look to expand overseas. This development is shaping a budding 'smart economy'. China's AI push is expected to fuel further growth in the tech and AI sector.

China's 15th Five-Year Plan (2026–2030), unveiled at the NPC's Two Sessions opening on March 5, mentions AI more than 50 times and includes a sweeping "AI+ action plan" to integrate artificial intelligence across all industries. The plan targets raising core digital economy industries to 12.5% of GDP by 2030, mandates R&D spending increases of at least 7% annually, and designates AI, robotics, quantum computing, and 6G as "future industries" receiving targeted support. The GDP growth target was set at 4.5%–5% for 2026 — the lowest on record — signaling Beijing's pivot from raw growth to high-quality, tech-driven development.

The policy shift has fueled a broad rally in Chinese tech stocks. BABA shares have jumped over 60% since DeepSeek's January release, with Alibaba Cloud revenue accelerating 18% YoY. Tencent has climbed more than 33% to its highest level in nearly three years after launching its Hunyuan 2.0 model, while BIDU surged 9.4% in a single session on news that its AI chip unit Kunlunxin filed for a Hong Kong IPO. The Hang Seng Tech Index has gained 28.5% since DeepSeek's January 20 R1 model release, outpacing the broader Hang Seng Index's 20.5% gain over the same period.

Analysts at Citigroup and Morgan Stanley are favoring Chinese tech and innovation sectors, with Morgan Stanley projecting 4.8% GDP growth for 2026. New financing mechanisms allowing tech firms to use data assets and intellectual property as collateral could help fix funding gaps for asset-light AI startups. However, some observers note that U.S.-listed Chinese stocks have not fully captured the rally — the KWEB ETF remains down 8.8% year-to-date, and Bloomberg has questioned whether Chinese AI stock gains have kept pace with the underlying breakthroughs.