China Equity Strategy: The AI Theme: Deleveraging as a Healthy Reset

研报英文原文证据摘录

China Equity Strategy: The AI Theme: Deleveraging as a Healthy Reset

Global Markets Strategy

15 July 2026

China Equity Strategy

The AI Theme: Deleveraging as a Healthy Reset

In our onshore marketing conversations over the past week, client Equity Macro Research

discussions have centered on the China AI ecosystem. Investors broadly AC Erin Zhang, CFA

agree that the recent pullback has been fueled by deleveraging, but hold (86-21) 6106 6328

diverging views on the longer-term fundamental outlook, particularly the erin.zhang@jpmorgan.com

sustainability of AI capex. We disagree with the bubble-soon-to-burst SAC Registration Number: S1730521090002

narrative based on three fact checks: 1) Balance sheet health. Liability-to- J.P. Morgan Securities (China) Company Limited

asset ratios of both Chinese and global hyperscalers remain at c40%, well

Tim Huang

below the leverage extremes of prior cycle peaks in China real estate (852) 2800-4323

(c100%) and US dot-com bubble (c230%) (Figure 1). 2) Capability tim.huang@jpmorgan.com

frontier still advancing. Large language model providers continue to J.P. Morgan Securities (Asia Pacific) Limited/

push performance boundaries, with Chinese models striving to close the J.P. Morgan Broking (Hong Kong) Limited

gap on US peers too. We see the upside optionality that technological Rajiv Batra

(65) 6882-8151

advancement unlocking new use cases and driving ARR growth (Figure rajiv.j.batra@jpmorgan.com

2). 3) Hardware bottleneck is not going away soon. Critical AI J.P. Morgan Securities Singapore Private

component capacity constraints are unlikely to be resolved before late Limited

2027–28 at the earliest. The next two quarters are unlikely a validation Head of China Research

window (Figure 3-Figure 4).