All Chinese Companies Removed from Global Top 10 by Market Cap Due to Regulatory Impact

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kim Suhwan] As the Chinese government continues to intensify regulatory pressure on its major domestic corporations, causing their stock prices to plummet day after day, it has been revealed that no Chinese companies remain in the global top market capitalization rankings.

On the 16th, Bloomberg reported that Tencent, which boasted the largest market capitalization among Chinese companies, was excluded from the global top 10 market capitalization list due to the decline in its stock price.

The current top 10 companies by market capitalization, ranked by size, include Apple ($2.46 trillion), Microsoft ($2.29 trillion), Alphabet (Google's parent company, $1.93 trillion), Saudi Aramco ($1.87 trillion), Amazon ($1.76 trillion), Facebook ($1.05 trillion), Tesla ($757 billion), Berkshire Hathaway ($630 billion), TSMC ($563 billion), and Nvidia ($559 billion).

Tencent ranked 11th with a market capitalization of $552 billion.

With Tencent's removal from the top 10 list, for the first time since 2017, no Chinese companies are included in the top 10 market capitalization rankings.

This is analyzed to be influenced by the continuous decline in stock prices of major corporations due to the Chinese government's regulatory measures.

Previously, the Chinese government imposed a complete ban on weekday gaming for minors and ordered Tencent Music Entertainment, a subsidiary of Tencent's music division, to relinquish its exclusive streaming rights with domestic record companies. Considering that gaming and entertainment businesses were major revenue sources for Tencent, these government measures are interpreted as a significant blow to the company.

Tencent has warned that further regulatory measures from the government may follow.

In its Q2 earnings report last month, Tencent stated, "More regulations will be implemented in the near future," adding, "Considering that regulation of the internet industry had been lax, this was expected."

Since Tencent reached its market capitalization peak in January this year, it has fallen by 30%, erasing approximately $390 billion in market value.

Another major Chinese corporation, Alibaba Group, has also not escaped regulatory scrutiny, with its stock price dropping about 26% from its peak in February. In April, authorities imposed the largest antitrust fine ever on Alibaba Group, amounting to 18.2 billion yuan (approximately 3 trillion won).

On this day, Tencent shares were trading on the Hong Kong Stock Exchange at a price about 1% lower.