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Zhang Shidong

The battling has been fierce, but China has pulled ahead of Japan enough to reclaim its title as home to the world’s second-largest stock market.
Japan took the second spot about six months ago, as China’s markets were hit by the US trade war and a slowing domestic economy.
On November 13, China edged just ahead, but they have been in a tug of war since.
Now China could rightfully claim it’s out front.
The combined market values of the companies on the Shanghai and Shenzhen exchanges totalled US$5.7 trillion as of the close on Tuesday, compared with US$5.67 trillion for Japan’s market, according to the latest data compiled by Bloomberg. That is still less than one per cent difference.
China had a rough 2018, with a 25 per cent drop on the Shanghai exchange that made it the world’s worst performing major market.
Shanghai’s stock index ends 2018 as the world’s biggest loser as trade war, slowing Chinese economy weigh on confidence
But China has been on a tear since the start of the new year, with the Shanghai benchmark moving up 3.3 per cent, largely on hopes that the US and China will reach an agreement on trade and Beijing will pump more stimulus into the economy.
Chinese team arrives in US for trade war talks under shadow of latest Huawei charges
In comparison, Japan’s Nikkei 225 index has risen 2.7 per cent this year.
The US is the world’s No 1 stock market, with the New York Stock Exchange and the tech-heavy NASDAQ boasting a US$28.8 trillion market cap.
It will not be a slam dunk for China to keep its No 2 title away from Japan.
China’s growth fell to 6.4 per cent in the fourth quarter, the smallest growth in almost a decade, as financial deleveraging reined in “shadow banking,” or lending outside the traditional banking system.
Meanwhile, a deluge of smaller listed Chinese companies recently lowered their earnings forecasts significantly, weighing down on their share prices. Big, state-owned firms are no exception, as China Life Insurance said Tuesday night that earnings probably dropped by as much as 70 per cent last year because of decreased investment returns.
This week, China may widen its lead over Japan if the high-stakes China-US trade talks in Washington go well. If a deal is struck, or appears on its way, Chinese stocks can be expected to rebound.
But if the talks sour, Japan may be on its way to getting the No 2 title back.


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China stock market

It’s China! No, it’s Japan! In months-long battling, China regains its title as home to world’s second-largest stock market

Sumo wrestlers fight at the Grand Sumo Tournament in Hawaii 2007. Photo: Agence France-Presse

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China Business

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China, Japan have been battling like fierce sumo wrestlers for two months – but now China has noticeably pulled ahead
Trade talks getting ready to begin could be pivotal in China-Japan contest


It’s been a battle worthy of sumo wrestlers – China and Japan have been fighting for two months over the title to be the world’s No 2 stock market. China just pulled ahead.


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