China has reportedly suspended approvals for new share listings after a steep sell-off in artificial-intelligence and chip stocks wiped about $480 billion off the STAR 50 index, as Beijing moves to calm its sliding stock market.

The rout has hurt everyday investors who bought into the two-year rally, and global markets are watching for signs that U.S. technology shares could face similar pressure.

A deep slide in AI and chip stocks

The STAR 50, a Shanghai index of China's homegrown chip and AI companies, has lost about 40% since peaking in July, wiping out roughly $480 billion in market value. The broader CSI 300 index is down about 20% from its June high after falling 8.5% in October alone, its worst month in more than ten years.

Amid the continued decline, China has reportedly paused the approval of new share listings.

AI stocks account for 42% of China's total market value and 57% of trading activity across mainland and Hong Kong exchanges — a concentration that explains why the sell-off is being felt across the whole market rather than in a single corner of it. The STAR 50 still trades at about 100 times its companies' yearly earnings, compared with roughly 30 times for the U.S. Nasdaq 100, meaning buyers of Chinese AI stocks are paying more than three times as much per dollar of current profit as their U.S. counterparts.

Recent debuts have also retrenched sharply. Shares of humanoid robot maker Unitree (SSE: 688836) jumped about 600% when they debuted in August and have since lost half their value. Memory chipmaker CXMT (SSE: 688825) listed in July and briefly became Shanghai's most valuable stock, but has since lost close to a third of its value — a swift reversal that shows how quickly appetite for freshly listed tech names has cooled.

Support measures fall short

Authorities have rolled out a series of interventions. Central bank swap operations are being used to supply cash to the market, with 31 securities firms and fund managers requesting more than $15 billion. Regulators have also cut the cost of borrowing for share buybacks and pushed big technology firms to repurchase their own stock.

Earlier in October, the government put $19 billion into exchange-traded funds, its largest market intervention since early 2025. Those steps have so far failed to reverse the slide.

Mainland shares rose on Monday on hopes of state support, then fell again on Tuesday. The Shanghai Composite lost 1% and the STAR 50 dropped 4%, while the CSI 300 ended little changed. Analysts at 22V Research said the measures are meant to set a floor under prices, and they doubt officials will try to push for a big rebound.

Why listings are being halted

New listings had served as a channel for Beijing to move household savings into its technology push, but with prices falling, regulators want to avoid adding more shares to a weak market. For companies hoping to go public, the freeze also stalls the fundraising route an IPO provides.

Hong Hao, chief investment officer at Lotus Asset Management in Hong Kong, said the sell-off will "put a stop for many of the companies trying to get themselves listed."

The pause echoes earlier interventions. In August 2023, the China Securities Regulatory Commission limited new share offerings to support the market; IPO volume then fell 70% from a year earlier, and only 42 companies priced deals in the following months — a precedent that offers a benchmark for how sharply a listing freeze can thin the IPO pipeline.

Wu Qing, head of China's securities regulator, has promised that authorities will "do everything possible to maintain the safety and stability of the capital market," and will encourage eligible firms to step up share buybacks.