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Recent data shows that the total market value of American companies has approached half of the world's total market capitalization, while the market value of Chinese companies in China's A-shares and Hong Kong stocks has fallen from 20% to 10%, causing people to pay attention to the trend. U.S. stocks continue to expand the scale of wealth, while A-shares are shrinking, and investors' wealth is under great pressure. Faced with this phenomenon, we can't help but think: what is the underlying reason behind it?
In recent years, the speed of issuance of new shares in the A** market has been amazing, as high as hundreds, and the amount of financing ranks first in the world. In 2023, only 313 new listings will be listed, raising a record amount of RMB356.4 billion. However, the continuous increase in new shares has led to the flow of funds to major shareholders, coupled with the violations of major shareholders**, restricted shares refinancing and other behaviors, the wealth of small and medium-sized shareholders has been ruthlessly harvested. This phenomenon not only harms the interests of small and medium-sized shareholders, but also makes the A** market full of false transactions and market wealth accumulation, resulting in a decline in the overall market value.
In the A** field, new stock issuances are springing up like mushrooms after a rain, and the listing of each new stock means the beginning of a capital game. With the continuous increase in new shares, the flow of funds has become unstable, and major shareholders seek benefits through illegal means, while the majority of small and medium-sized shareholders have suffered losses in market fluctuations. This phenomenon makes the A** market risky and investor confidence at risk.
There is a huge difference between the market capitalization of A-shares and the top 10 U.S. stocks, with U.S. stocks dominated by technology-based companies, such as Microsoft, Apple, etc., while A-shares are dominated by traditional industries, such as China Mobile, Kweichow Moutai, etc. Technology-based enterprises are regarded as the engine of future economic development, while traditional industries have a clear ceiling in terms of growth potential. This structural difference has led to the continuous rise of the value of the United States, while the value of the value of the United States is limited by the limitations of the future growth space of traditional industries.
The continuous growth of the expanded value of the United States is due to the uniqueness of its market structure, and the rise of technology-based enterprises has given the market more imagination and growth potential. In contrast, the A** field is dominated by traditional industries, although it has had brilliant achievements in history, but in the face of the wave of scientific and technological innovation today, this traditional model has shown a bottleneck. With the change of the times, whether A-shares can actively transform has become the focus of investors' attention.
The gap between the economic aggregates of China and the United States has been widening, and the proportion of China's GDP in the US GDP has been declining year by year, from 77% to 65%. This increase in the size of the economy will inevitably have an impact on the market capitalization, reflecting the differences in each country's economic strength and development potential. With the continuous growth of the U.S. economy, the U.S. market has steadily improved, while the wealth scale of A-shares and Hong Kong** has been challenged, and the market value has continued to decline.
The gap between the two major economies of China and the United States is gradually emerging, and although China's economic growth rate is still ahead of most countries, it is significantly behind developed countries such as the United States. This widening of the economic gap has a direct impact on the comparison of market capitalization, reflecting the position and potential of each country in the global economy. Under the wave of globalization, A-shares and Hong Kong stocks need to intensify reform efforts to enhance market vitality and attractiveness in order to remain invincible in the fierce competition.
By analyzing the phenomenon that the market value of US companies is close to half of the world's and the market value of Chinese companies has fallen to 10%, we can see that the main reasons for this phenomenon are the additional issuance of new shares, the different structures of the Chinese and American economies, and the gap between the size of the Chinese and American economies. As investors and market observers, we need to recognize the problem, strengthen market supervision, promote the healthy development of the market, and create a more favorable investment environment for investors. At the same time, enterprises should also think about the road of transformation and upgrading, adapt to the trend of scientific and technological innovation, improve the innovation strength of domestic enterprises, and enhance the competitiveness of market value, so as to achieve a virtuous cycle and sustainable growth.
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