China's economic and stock market performance in 2026 is significantly tied to U.S. relations and global AI spending. Despite a strong year for Chinese stocks in 2025, driven by AI and tech sectors, the domestic 'old economy' faces challenges. Declining property prices, slow retail sales, and a weak job market are impacting consumer spending and household wealth. While recent détente between leaders offers hope for stable U.S.-China relations, domestic economic issues remain a key concern for China's growth outlook.