Separate Goldman Sachs analyses show Chinese AI stocks taking a larger share of domestic trading as companies expand deeper into overseas markets.
Goldman Sachs is highlighting two major shifts in how investors may need to view Chinese companies: the rapid rise of artificial intelligence stocks at home and the growing reach of Chinese businesses overseas. The trends come from separate Goldman Sachs analyses, but both point to a larger change in China’s role in global markets.
In the AI market, Goldman Sachs says China is developing an increasingly distinct technology ecosystem alongside the one centered on the United States. The bank now separates Chinese AI stocks into exporters tied more closely to global technology spending and geopolitics, and domestically focused companies that may benefit from China’s own AI investment, adoption and government support.
AI-related stocks now make up 42% of the combined market value of shares listed in mainland China and Hong Kong, up from 24% in 2024, according to Goldman Sachs figures reported by Business Insider. Their share of trading turnover has climbed to 57% from 48%. Goldman also estimated that nearly $5 trillion in market value has been created in Chinese AI-related public equities since early 2025 through share-price gains and initial public offerings.
The bank said China still trails the leading edge of semiconductor technology, but the gap is narrowing in other areas. Goldman strategists said Chinese companies are competitive in parts of AI infrastructure, large language models and physical AI applications. That change has made it harder to treat artificial intelligence as one global investment theme because Chinese companies can be affected by different spending patterns, regulations and geopolitical pressures than their U.S. counterparts.
A separate Goldman Sachs study released in September examined the international growth of Chinese companies across 11 sectors. That research covered 40 companies, including 21 Chinese businesses and 19 global competitors, and projected that the Chinese companies’ average market share in export markets could rise from 18% in 2026 to 31% by 2035.
Goldman also projected that revenue from those international businesses could grow 3.6 times by 2035.
The strongest gains have been in emerging markets. Goldman’s October 13 analysis said Chinese products have probably reached about 24% market share in emerging economies, while the comparable shares were about 16% in the European Union and 10% in the United States. The firm said revenue growth for the Chinese companies it studied in emerging markets has been about 15 times the organic growth rate of those local markets.
The industries involved go well beyond electric vehicles and consumer electronics. Goldman identified potential growth opportunities in areas including robotaxis, e-commerce, surgical robots, clear dental aligners and power equipment. The research suggests some companies that entered overseas markets later may still have substantial room to expand, while sectors that are already highly contested can face stronger price pressure and trade barriers.
China’s weak domestic demand is one reason overseas expansion has become more important. Official data showed that Chinese retail sales rose only 0.4% in August from a year earlier, while fixed-asset investment fell 7.2% during the first eight months of 2026. The pressure has been especially visible in the auto industry, where companies have increasingly looked abroad as domestic competition and price cutting intensified.
This aggressive competition is often described in China as “involution,” referring to a cycle in which companies fight for market share through lower prices, expanded production and shrinking profit margins. Chinese authorities have responded with an “anti-involution” campaign. In September, the National Development and Reform Commission and the State Administration for Market Regulation issued rules allowing officials to examine costs in industries where companies are suspected of disorderly low-price competition.
For investors, the impact of Chinese expansion may extend beyond the companies doing the exporting. Goldman found that established competitors can be punished sharply by financial markets when they lose share. Its research said a 10% to 15% decline in market share or revenue can be associated with a 50% to 80% drop in market capitalization as weaker sales, earnings and valuation multiples combine.
That does not mean Chinese companies will automatically convert overseas growth into higher profits. Goldman said investors remain skeptical about whether international expansion can remain profitable once competition intensifies. Trade restrictions, national-security concerns and limits on market access can also slow expansion in sensitive industries.
Chinese businesses are also changing how they enter foreign markets. Rather than relying only on exports, many are building factories, supply chains and local operations closer to customers. CFA Institute noted in October that companies are increasingly using both direct overseas investment and regional production networks, particularly in Southeast Asia, as they try to reduce trade friction and improve access to foreign markets.
Latin America is one example of that shift. Euromonitor International said Chinese exports to the region reached nearly $300 billion in 2025, up 7% from the previous year. The research group said Chinese brands are investing in local manufacturing, supply chains and commercial operations instead of competing only through imported low-cost products.
Euromonitor also found that Chinese brands have built strong positions in consumer electronics, appliances and electric vehicles across Latin America. It said Chinese appliance sales volume in the region was about 55% higher in 2025 than in 2020, while companies such as Shein have used digital commerce to gain market share quickly.
The changing picture suggests investors are dealing with two related but distinct developments. China’s AI market is becoming a larger and more self-contained investment ecosystem, while Chinese companies across many industries are expanding deeper into foreign markets.
Goldman Sachs is not saying that every Chinese company will benefit equally. Instead, its research points to a more selective approach in which investors may need to distinguish between domestic AI beneficiaries, global exporters and companies facing stronger overseas competition. The next stage will depend on whether Chinese businesses can turn growing international market share into sustainable profits while navigating tariffs, regulation and geopolitical restrictions.
IMAGE: The Goldman Sachs Tower – Jersey city, NJ.. Photo: Oriez / Wikimedia, taken 2008-02-20, Public domain