China's Market Cap Could Overtake U.S. by 2030

China stock market
China stock market

China could overtake the U.S. in terms of stock market capitalization by 2030, a report by Goldman Sachs says, according to the Financial Times. The world's most populous country has already surpassed Japan to become the second-largest economy. With China's economic growth at 10.3% when developed nations, including the U.S., are still struggling, this long-term prediction doesn't sound that far-fetched. Even if the country still has a lot of catching up to do.

And it's not just China, Goldman says. The value of all emerging markets will soar, rising fivefold to $80,000 billion from $14,000 billion (in constant U.S. dollars) today. Already, the firm notes, emerging-nation stock market valuation has increased sixfold in the past 15 years.

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In addition, Goldman estimates the emerging nations' share of global equity markets, which stands today at 31%, will increase to 55%, with the share of BRIC countries -- Brazil, Russia, India and China -- rising to 41%. The main reasons are economic growth in emerging nations and expanding investment in their equity markets by developed markets' institutions and funds.

China alone could see its stock market's share of global equity valuations increasing from 11% today to 28% in the next two decades, which means that by 2030 it could overtake the U.S.'s market capitalization, with India zooming to third place.