The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

By Ka Sing Chan

HONG KONG, June 24 (Reuters Breakingviews) - If China wants AI to revive its sluggish stock markets, officials may have to indulge some animal spirits. Regulators are paving the way for more high-tech listings in Shanghai, including supporting some Hong Kong-listed firms to float onshore. That will help channel capital back home but will test Beijing's longstanding aversion to market froth and volatility.

China's top securities regulator last week vowed to "actively embrace" a new phase of technological revolution. Besides the upcoming high-profile debuts of humanoid robotics darling Unitree and memory-chip champion CXMT, high-flying firms like Knowledge Atlas Technology 2513.HK, known as Zhipu AI, and MiniMax 0100.HK may soon also sell shares in Shanghai – a rare move for a Hong Kong-listed company.

Their homecomings should be welcome. Only a handful of state giants like China Mobile 600941.SS, 0941.HK and Semiconductor Manufacturing International Corporation 0981.HK, 688981.SS have made the leap from Hong Kong to the mainland, where more stringent regulatory oversight and capital controls have deterred most private-sector firms from trying. Cash-burning MiniMax and Zhipu may be less discerning.

More AI and tech listings will boost the country's CSI 300 Index .CSI300, which is up a paltry 6% this year, versus the double-digit percentage gains in the United States, Japan and elsewhere. China may not boast titans like Elon Musk's $2 trillion SpaceX or OpenAI, but the hype around artificial intelligence is just as prevalent. Zhipu's Hong Kong stock has surged over 1,500% since its January debut; with a market value of $125 billion, the company trades on more than 90 times its annualised revenue run rate for 2026, per Jefferies analysts.

At the same time, authorities have been cracking down on cross-border stock trading, hoping to bring capital back onshore to engineer what they call a "slow bull market". It's a potentially huge pool: as of June last year, investors from mainland China and Hong Kong held more than $600 billion of U.S. equities, nearly double 2020 levels, according to U.S. Treasury data.

But the arrival of firms like Zhipu will also stoke exuberance. The 609 companies on Shanghai’s Nasdaq-style STAR Market already trade at an average of about 105 times earnings as of Tuesday, per official data. Volatility will rise too: Zhipu’s shares fell 10% on Tuesday after nearly doubling over the previous five trading days. Beijing will have to learn to tolerate some froth.

CONTEXT NEWS

The China Securities Regulatory Commission will support ‘eligible Hong Kong-listed companies to list in the domestic market’, Chairman Wu Qing told the 2026 Lujiazui Forum in Shanghai on June 17.

In a document published in June 2025, the State Council said it will allow Greater Bay Area companies listed in Hong Kong to seek a secondary listing in Shenzhen.

In a stock exchange filing in Hong Kong, MiniMax said on May 31 it is exploring a potential A‑share listing, with its board approving a preliminary plan to issue renminbi-denominated shares that could trade on Shanghai’s STAR Market. Zhipu also announced in a filing on June 1 that its board has approved a formal proposal to pursue an A-share listing on Shanghai’s STAR Market, which involves selling up to 8% of its enlarged share capital, subject to regulatory approval.