The Chinese mainland equity markets staged a significant recovery on March 25, with major benchmarks reclaiming psychological strongholds. The Shanghai Composite Index surged past the 3,900-point mark, while the tech-heavy ChiNext Index stabilized above 3,300, underpinned by a massive 2.18 trillion RMB trading volume. This broad-based rally saw over 4,800 stocks advancing, signaling a return of investor appetite following recent periods of volatility.
The primary catalyst for the day’s momentum was an extraordinary surge in artificial intelligence infrastructure demand. The National Data Bureau revealed that daily token usage for AI models in China has skyrocketed from 100 billion at the start of 2024 to over 140 trillion this month. This thousand-fold increase in digital activity has shifted market focus toward the physical backbone of AI: computing power and the massive electrical grids required to sustain it.
Energy stocks became the unlikely stars of this high-tech rally, driven by the concept of 'Compute-Power Coordination' now embedded in official government work reports. Investors are increasingly betting on the synergy between green energy and data centers, anticipating that the expansion of AI will necessitate a massive build-out of wind and solar capacity. Major brokerage Citic Securities projects that this dual demand for green fuels and computing power could drive nearly 465GW of new wind power demand by 2030.
In the telecommunications sector, breakthrough achievements in optical fiber transmission provided further tailwinds. Chinese researchers successfully recorded a 2.5 petabits-per-second real-time transmission capacity, reinforcing China’s competitive stance in global communication infrastructure. This technological milestone, coupled with news of SK Hynix’s $10 billion fundraising plan for AI-related semiconductor clusters, catalyzed significant gains in CPO (Co-packaged Optics) and chip-making equipment stocks.
Conversely, traditional energy and fossil fuel sectors faced downward pressure as geopolitical rumors hinted at a potential breakthrough in Middle Eastern ceasefire negotiations. Oil and gas stocks retreated as global supply risks appeared to soften, while the coal and photovoltaic equipment sectors lagged behind the broader market surge. This rotation suggests a tactical shift from defensive 'old energy' positions toward the high-growth 'new infrastructure' sectors defined by the AI revolution.
Leading financial institutions like CICC and Guosen Securities maintain that the current market valuation represents a medium-term low, offering a strategic entry point for long-term investors. While short-term volatility remains a factor, the underlying logic of China’s economic transition toward advanced manufacturing and AI remains intact. The consensus among top-tier analysts is that the recent correction has effectively flushed out excessive risk, leaving the market ripe for a 'steady progress' trajectory focused on structural upgrades.