Why is the US more exuberant than China? in World Economy News 22/06/2026 Artificial intelligence investment and stronger industrial activity are helping support U.S. equities, while weak domestic demand continues to weigh on Chinese markets, according to a Yardeni Research note. The MSCI China index has largely traded sideways since 2010, compared with a roughly sevenfold increase in the MSCI U.S. index over the same period. A similar pattern can be seen in technology stocks. The Invesco China Technology ETF has remained broadly flat since the global financial crisis, while the Invesco QQQ ETF has risen about seventeenfold. China’s property downturn and weak consumer confidence were highlighted as key challenges for the world’s second-largest economy. Consumer sentiment has yet to recover to pre-pandemic levels. Real retail sales growth fell 1.2% year-over-year in April, the first negative reading outside the pandemic period. At the same time, industrial production increased 4.1%. The combination of soft consumption and rising factory output has contributed to excess industrial capacity, with manufacturers increasingly relying on exports to absorb production. Bank loan growth slowed to 5.5% in May, the weakest pace since 2001, adding to signs of subdued domestic demand. In the United States, industrial production has been trending higher since mid-2024. Although output rose just 0.1% in May, technology-related industries continued to support growth. Semiconductors and other high-tech manufacturing sectors were among the strongest contributors. The research also pointed to artificial intelligence infrastructure as an important source of investment. Technology production has accelerated since the launch of ChatGPT in late 2022. Growing electricity demand from AI data centers was identified as another long-term driver for utilities and power producers. The outlook for industrial activity could also benefit from higher defense spending, with the Trump administration se