(ECNS) -- China's capital market is showing signs of structural change, with technology firms increasingly gaining investor attention over traditional consumer giants.
Yuanjie Semiconductor Technology surged more than 10% last Friday, with its share price briefly reaching 1,460 yuan (about $214.26), overtaking liquor giant Kweichow Moutai to become the highest-priced stock in China's A-share market.
The company reported revenue of 601 million yuan and net profit of 191 million yuan in 2025, compared with Moutai's 172.05 billion yuan in revenue and 82.3 billion yuan in profit. Analysts say the shift reflects growing investor focus on future growth potential rather than current earnings.
Market analysts point to artificial intelligence and computing power demand as key drivers behind the reallocation of capital. The rise of AI-related sectors, including optical communication and semiconductor technologies, has fueled a surge in technology stocks, pushing indices including the ChiNext to near 11-year highs.
The trend aligns with China's push to develop what policymakers describe as "new quality productive forces," emphasizing innovation, advanced manufacturing and digital transformation.
China's economic data further supports this trend. China's GDP grew 5.0% year-on-year in the first quarter of 2026, according to the National Bureau of Statistics. Industrial demand in several emerging sectors has remained strong, with some companies reporting capacity pressures.
The growing prominence of the technology sector is also evident in market composition. According to China Securities Regulatory Commission, by September 2025, technology stocks accounted for more than one-quarter of the total A-share market value, surpassing the combined share of traditional sectors such as banking, real estate and non-bank financials.
International interest has also picked up. According to a report by BNP Paribas, U.S. investor sentiment toward Chinese and Hong Kong equities has shifted markedly, with $14 billion flowing into the market over a recent three-month period—the largest quarterly inflow in nearly three years.
Media outlets including CNBC have noted that China's innovation capabilities could rival or even surpass those of the United States in certain areas, potentially unlocking long-term shareholder value.
Meanwhile, Bloomberg cited London-based asset manager Eurizon SLJ Capital as predicting that China's stock market could rise by 10 percent by year-end, supported by policy measures and relatively low valuations.
The transition in market leadership—from consumer staples to technology—has been gradual but consistent.
As Chinese economists note, each stage of economic development produces its own market leaders. In today's era of rapid technological advancement, companies at the forefront of AI and innovation are increasingly seen as the new drivers of growth, positioning China's economy for its next phase of development.
(By Gong Weiwei)
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