Chinese stocks have gained nearly $4.9 trillion in value this year, aided by the country’s rapid recovery from the new coronavirus, a string of initial public offerings, and a blistering rally in shares of consumer and technology companies.
Chinese businesses listed on exchanges from New York to Shanghai have added 41% to $16.7 trillion, according to S&P Global Market Intelligence data for the year through Dec. 22. That outpaces a 21% run-up for American companies to $41.6 trillion.
“It’s been a very strong year” for China, said
the chief investment officer for KraneShares in New York. He said the country’s economic rebound, global investors’ appetite for high-growth stocks, and a robust IPO market had all worked in China’s favor: “The end result is a pretty dramatic growth in the size of capital markets.”
China accounts for nearly a third of world-wide increases in stock-market capitalization in 2020, the S&P data shows. Global stocks have gained 16% to $104 trillion.
The surge comes despite heightened friction with the U.S.over technology, trade and finance—and attempts by the U.S. government to discourage American pension funds and other institutions from holding Chinese stocks.
Legislation signed this month by President
could force Chinese companies to delist from exchanges in New York if their audit papers aren’t inspected by U.S. regulators for three consecutive years. The Trump administration has also moved to stop Americans investing in firms it says help the Chinese military, leading
and other index providers to drop some stocks from their benchmarks.
The advances have cemented China’s position as the foremost emerging market. At the end of November, shares of Chinese companies made up more than 40% of two popular stock indexes tracking developing countries, from under 30% five years ago.
Biggest Chinese companies by market value
“If you buy global emerging markets, you are buying disproportionately Asia, and disproportionately China,” said Herald van der Linde, head of equity strategy for the Asia-Pacific region at
alone accounted for nearly 7% of the 26-country MSCI Emerging Index—or more than Brazil’s entire contribution to the benchmark—at the end of November.
The importance of China, in particular Alibaba, in the indexes became a…
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