As the economy is sluggish and the stock market continues to plummet, huge sums of money are flowing from China to the United States, where the total market capitalization of American companies now accounts for nearly 50% of the global stock market capitalization, the highest level in 20 years.
Nikkei reported that QUICK FactSet data shows that since the end of 2023, Chinese mainland and Hong Kong companies have lost the equivalent of US$1.7 trillion in market capitalization. China's share of global market capitalization has fallen to about 10 percent, about half of its peak of nearly 20 percent in 2015. In the same period, the total market value of the United States increased by 1.4 trillion US dollars to 51 trillion US dollars, accounting for 48.1% of the total, the highest level since September 2003, and the gap between China and the United States is widening.
As of Friday, 236 U.S. companies were among the world's 500 most valuable companies, up 15 percent from three years ago, while the number of Chinese companies fell about 60 percent to 35. Baidu, JD.com and electric car maker NIO all fell off the list, while the two domestic giants, Alibaba and Tencent, also lost a total of $31 billion in market value over the same period. At present, it is rumored that Ali is considering selling Yintai, Ele.me and other businesses, which will be a major strategic shift for Alibaba.
In the tech sector, chipmaker Nvidia is the world's sixth-most valuable company, with a near-monopoly on high-end, powerful processors. In 2022, the United States imposed a ban on the export of semiconductors and chip equipment to China, which deprived domestic companies of ready-made channels for obtaining high-end chips, and also caused SMIC's market value to lose about a quarter since the beginning of 2024.
Last quarter, the flagship fund of Barron Capital, a U.S. asset manager, downgraded its holdings of Chinese equities to zero for the first time since the fund's inception in 2012. Prosus, the Dutch subsidiary of South Africa's Naspers Group, said that its stake in Tencent will be reduced by 2% to 3% a year, and is expected to fall to about 24% to 25% by the end of this year.
Investors are looking for investment in other Asian countries as they have fled from home, with India and Japan being the most popular investors. According to the National Depository of India, India attracted $20 billion in foreign capital inflows in 2023. In mid-January, India briefly overtook Hong Kong to become the world's fourth-largest stock market. In the opinion of some investors, this trend will continue. Morgan Stanley predicts that by 2030, the Indian stock market will become the third largest in the world.
In the five weeks of this year, more than 400 billion yen of funds flowed into exchange-traded funds (ETFs) for Japanese stocks overseas, also hitting a new high in six months.
From all aspects, it can be seen that the domestic economy and enterprises are facing a lot of challenges, how to survive this long winter, and foreign enterprises for a long time, need domestic support from all aspects, this support may not be limited to people, property and property.