The remarks come as Beijing has intensified scrutiny of capital markets this year, including a regulatory crackdown on cross-border stock trading<\/a> by mainland investors, and reflect growing concern that the AI rally sweeping Chinese equities has created openings for market abuse. <\/p>\n State media reported earlier this month<\/a> that some executives and major shareholders at A-share chipmakers \u2014 those traded on the mainland \u2014 have rushed to sell holdings this year to cash in on the AI rally. China’s\u00a0CSI\u00a0artificial intelligence\u00a0index, which tracks companies in the\u00a0AI\u00a0supply chain, has soared nearly 30% this year, compared with the 6% year-to-date gain in the broad-based CSI 300 index. <\/p>\n The CSRC will also issue guidance on the use of AI in capital markets particularly targeting illegal use of tools to generate stock recommendations, Wu said,, as well as the spread of rumors and illicit trading enabled by the technology. <\/p>\n The use of AI tools in trading has remained a regulatory blind spot, according to Tianchen Xu, senior economist at the Economist Intelligence Unit. <\/p>\n “Beijing is increasingly concerned about AI-related financial risks \u2014 from deepfake videos using public figures to promote stocks, to listed companies exaggerating their ‘AI story’ to inflate valuations,” said George Chen, partner and chair of the digital practice at The Asia Group. “Regulators view these trends as early signs of a potential market bubble.” <\/p>\n Companies with little genuine connection to AI or advanced technology have also sought to attach themselves to the theme to lift their share prices, Xu said \u2014 a pattern, he noted, that has played out in previous market cycles around sectors like commercial spaceflight and the low-altitude economy.<\/p>\n Beijing’s policy stance contrasts with the enthusiasm for AI stocks on Wall Street, taking a more cautious approach and actively working to cool speculative sentiment, Chen said. <\/p>\n AI-related risks to financial markets are also likely to feature in the U.S.-China AI dialogue<\/a>, which the two countries agreed to establish following President Donald Trump’s meeting with President Xi Jinping in Beijing last month, Chen said. <\/p>\n![\"China's](\"https:\/\/www.newsbeep.com\/ie\/wp-content\/uploads\/2026\/06\/108322959-17816714261781671423-46594163281-1080pnbcnews.jpg\")
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