TOKYO – The market capitalization ranking of East Asian companies is shaking. The combined market cap of the two major Chinese information technology companies has plummeted to $ 330 billion since late last year as a result of Beijing’s toughest regulations. In contrast, semiconductor manufacturers are in growing demand, and decarbonization-related companies promoting China, such as electric vehicle battery producers, are experiencing an increase in their market values.
Nikkei ranked East Asian companies by market capitalization according to QUICK-FactSet data, finding sharp falls in the value of Chinese IT companies in the period from late 2020 to August 30 due to antitrust fines and toughened regulations, such as listing restrictions, introduced by the Chinese government.
Tencent Holdings’ first-order market cap stood at $ 574.3 billion on August 30, a 20% drop from the end of 2020. Alibaba Group Holding fell from second to third place with a drop 30% of market value to $ 440.6 billion. its share price continued to renew post-listing lows.
Tencent and Alibaba once followed the high-tech American giants collectively known as GAFAM, such as Apple and Amazon.
Toughened Chinese regulations are also beginning to affect luxury goods manufacturers. Fifth liquor producers Kweichow Moutai, fifth, and Wuliangye Yibin, 20th, saw their market values fall by 20% and 30%, respectively.
Instead, chip-making giant Taiwan Semiconductor Manufacturing Co. it advances rapidly to the foreground. On August 18, it temporarily overtook Tencent as the largest company in East Asia due to falling stock prices of Chinese companies. TSMC is currently behind Tencent with a market value of $ 564.4 billion, an increase of more than 10% over the end of 2020.
TSMC’s rise in the ranking reflects not only the fall in stock prices of Chinese IT companies, but also their growth due to global semiconductor demand.
Compared to the market capitalization rankings of a decade ago, Chinese companies continue to maintain a high level, but there have been notable changes in their business sectors. The ranking at the end of 2010 was led by PetroChina and other energy companies, including CNOOC, as well as the Industrial and Commercial Bank of China and other financial institutions, which reflect China’s rapid economic growth.
Although the ranking of energy companies is currently falling, Contemporary Amperex Technology Ltd. (CATL), the world’s largest car battery maker and the largest electric vehicle manufacturer BYD Auto, came in ninth and 24th place, respectively, in the bottom ranking.
VE-related companies in China receive preferential treatment in marketing and other operations from the government, which has promised that the world’s second-largest economy will achieve net carbon dioxide emissions by 2060.
In terms of national and regional shares in the rankings of the top 200 companies by market capitalization, China had a share of more than 50% in 2021, up from zero in 1990. Although it is not known to what extent will extend the effects of government regulation, the increase in China’s share is said to be partly attributable to activities such as startup promotions, such as the Meituan food distribution platform, to the highest market capitalization positions .
South Korea, which had a 10% stake in the 2010s in major plugs from electrical and semiconductor equipment manufacturers such as Samsung Electronics, saw its ratio shrink to 6% due to the fall in value of conventional companies, including steelmaker POSCO and auto parts producer Hyundai Mobis, despite increases by computer companies such as Naver, which has the free Line app under its wing, and Kakao, which owns the platform Kakao Talk messaging.
Japan has experienced a sharper drop in the last decade than South Korea, from 38% to 27%. In 1990, when the Japanese “bubble” economy was in full swing, Japanese companies, led by major commercial banks, accounted for more than 90% of the top 200 companies. While they also led the world capitalization ranking, Toyota Motor is currently the only Japanese company in the top 10 in East Asia.