Dragon races ahead as gulf between China and India market caps widens

China's m-cap is now 4.3x India's, whose m-cap grew just 17 per cent to $2.5 trillion in CY20 - 2.4 per cent of the global m-cap

China’s market capitalisation (m-cap) grew 49 per cent to touch $10.9 trillion in CY20, and is now 10.5 per cent of the global m-cap of $103 trillion. The country’s m-cap is now 4.3x India’s, whose m-cap grew just 17 per cent to $2.5 trillion in CY20 — 2.4 per cent of the global m-cap. The gulf could have widened further had China not halted Ant Group’s $37-billion IPO.

The two countries were neck-and-neck in the m-cap sweepstakes till the end of 2006. China was a much bigger economy at $2.75 trillion in 2006, when India stood at $940 billion, according to World Bank data. However, its stock market was under-represented, with its ‘market cap-to-GDP’ ratio at just 17 per cent. In comparison, the figure for India stood at 82 per cent in 2006.

China’s m-cap, however, jumped nearly 4x in 2007 to $3.8 trillion, leaving India far behind at $1.8 trillion. There was another surge in 2015, even as India’s m-cap grew at a much slower pace over the past decade. The emergence of tech giants such Alibaba and Tencent has aided China’s rise.