Asia Pacific Equity Research

Research evidence excerpt

Asia Pacific Equity Research

Due to market closures, there will be no publication of China / Hong Kong First to Market on 19 June.

Publication resumes on 22 June.

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China/HK First to Market 18 June 2026

Top Stories

China Equity Strategy, China, Hong Kong (Erin Zhang, CFA / Tim Huang / Alex Yao / Gokul Hariharan /

Billy Feng / Olivia Xu)

Unique opportunities in the China AI ecosystem

China AI industry – a two-fold capex expansion with domestic players catching up. China’s AI sector

features a tightly imbalanced supply-demand profile with clear structural divergence across segments. On

the demand front,policy-backed domestic adoption is driving outsized, market-leading growth. JPM

forecasts China’s AI data center capital expenditure to expand c2x from US$55-69bn in 2026 to US$95-

151bn in 2029 (CAGR of c20-30%), and domestic inference token demand to grow at a 330% compound

annual rate through 2030, underpinned by 70%/90%+ AI agent application penetration by 2027/29, and 40%

industrial AI penetration by 2030, as mandated by the Chinese government. The capex estimate above

refers to AI compute spend in China vs the US$160-200bn number quoted by clients on total capex by

Chinese players both domestically and overseas and both AI and non-AI. In addition, Bloomberg’s report

that China is preparing to spend cRmb2trn over the next five years on building data centers across the

country (US$295bn in total, or US$74bn per year on average), if confirmed to be something additional to the