The Chinese stock market is one of the largest in the world, ranking second after the US stock market. It is represented by three (or four if you count the recently created Beijing) exchanges.
The total capitalization of the Shanghai, Shenzhen and Hong Kong stock exchanges exceeded $13 trillion as of the end of 2022. At the same time, the platforms trade shares of both large Chinese companies that have long since become international and occupy high places in the Forbes rating (5 of the top 10 Forbes Global are from China and are represented on local platforms), as well as many issuers with medium and small capitalization, excellent investment indicators and interesting prospects.
The Chinese economy is showing steady growth, and in terms of GDP dynamics, it is ahead of all the economies considered the largest in the world. The PRC has long been in second place in nominal GDP, second only to the American one. At the same time, if you evaluate GDP taking into account purchasing power parity, China has already overtaken the United States several years ago and today is out of competition in the world.
This growth is due to:
- stimulation of the development of the most dynamically developing sectors of the global economy (biotechnology, semiconductor production, IT, etc.);
- growth of income and welfare of the population of the PRC, which contributes to the development of the domestic consumer market and requires acceleration in almost all industries and sectors;
- sole world leadership in many industries, for example, the introduction of “green” technologies in energy, the production of rare earth metals, etc.
At the same time, the Chinese stock market looks quite attractive in terms of the main investment multiplier P/E. It is still significantly (2-3 times lower) than the historical maximums set in 2007-2008, and has even recently demonstrated some downward trend. In comparison with other markets, P/E shows that the Chinese market is among the cheapest in the world.
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