China is tightening controls on investment influencers, fearing the AI stock market will become uncontrollable. This reflects efforts to maintain a balance between supporting the capital market and curbing excessive speculation.
On February 16, 2026, at 10:58 AM, Nikkei Asia reported that: Chinese authorities are cracking down on the aggressive marketing tactics of influencers promoting investment products. This reflects concerns about the overheated stock market driven by artificial intelligence (AI) and the government's ambitions in advanced technology.
Controlling market overheating without undermining investor confidence is a challenging task for policymakers, as much of the expectation for technological advancement is fueled by government policy objectives themselves.
Several Chinese media outlets reported in late January that the China Securities Regulatory Commission (CSRC) had sanctioned a fund management company for paying unqualified online influencers to promote its investment products.
CSRC documents, cited by the media, indicate that the company, referred to as "Fund D," entices investors with inappropriate risk tolerance to purchase high-risk products and disregards professional regulatory standards in exchange for short-term growth.
These measures reflect officials' concerns about the extreme volatility in the stock market. Data from data provider Wind shows that in January, 4.91 million stock trading accounts were opened in mainland China, the highest level since October 2567, as investors flocked to buy small-cap and lesser-known technology stocks linked to themes of AI, semiconductors, and commercial space.
While the CSI 300 index, which reflects large-cap stocks in the Shanghai and Shenzhen markets, has risen only 0.7% year-to-date, the CSI 500 index, which tracks mid- and small-cap stocks, has surged 11.2%, and the STAR Market composite index, which focuses on technology stocks, has increased 10.5%.
Shares of industrial equipment manufacturer Wuxi Autowell Technology have surged more than 120% since the beginning of the year, while shares of Puya Semiconductor and Focuslight Technologies have more than doubled, and shares of automation equipment manufacturer Supcon Technology have risen around 65%.
An analyst from an international securities firm stated that the capital flowing into these stocks was partly due to limited alternative investment options resulting from low government bond yields and falling housing prices, rather than because the companies had genuinely strong fundamentals.
The volatility in commodity prices further exacerbated market turmoil. Units of a fund investing in silver futures contracts, listed in Shenzhen, doubled in January before their price surged far beyond their intrinsic futures price.
Subsequently, on January 28, UBS SDIC Fund Management suspended accepting new unit orders to protect the interests of unit holders. Meanwhile, the Shenzhen Stock Exchange suspended trading of certain investors exhibiting abnormal behavior, and the fund's unit price plummeted by 10% per day for five consecutive days.
Chinese leaders continue to support the stock market as a tool to drive science and technology self-reliance, with regulators relaxing listing criteria for companies in strategic industries and accelerating the listing process for companies like chip startup Moore Threads, whose share price surged fivefold on its first day of trading in December.
Meanwhile, authorities have tightened controls on volatility. At a working meeting in January, attended by CSRC chairman Wu Qing, officials pledged to crack down. "Excessive speculation and market manipulation" "Decisively prevent extreme market volatility." One of its key missions is to manage the expectations of retail investors, who account for over 80% of daily trading volume.
Jason Louis, Head of Equity and Derivatives Strategy, Asia Pacific at BNP Paribas. It is stated that the Chinese government's primary goal is to keep market volatility low in order to incentivize long-term investment and reduce the image of cyclical boom-bust patterns in the Chinese stock market.
Prior to the sanctions against Fund D, the CSRC also fined and banned influencer Jin Yongrong from the stock market for three years after finding him involved in stock manipulation and illegal profit-making exceeding 41 million yuan. The financial social platform Snowball Finance banned his account and those of over 20 other users.
In the latest measures to curb speculation, the Shanghai, Shenzhen, and Beijing stock exchanges have increased the margin requirement for margin trading from 80% to 100%.
Analysts expect regulators to face another test after the nine-day Lunar New Year holiday ends and markets reopen on February 24th. During the festival, many companies are preparing to showcase their humanoid robotics capabilities in China Central Television (CCTV) Lunar New Year galas, while DeepSeek and other innovative AI developers are reportedly preparing to launch new models around the same time, which could further fuel market hype.
refer : asia.nikkei.com
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