Global Times | Rising 'tech content' in capital market reflects growing value in China's economy
The "tech content" of China's capital market is climbing rapidly, signaling a deeper transformation in the country's economic structure. The market's total capitalization has reached 107.32 trillion yuan ($15.08 trillion), with the electronics industry surpassing the banking sector to become the largest, accounting for 12.42 percent of the total - nearly 3 percentage points higher than at the beginning of the year, the Economic Daily reported on Wednesday.
This shift in the capital market reflects China's ongoing transition toward innovation-driven, high-quality growth. As technology-intensive industries expand their market presence, they are creating better profit opportunities for investors, signaling rising value in China's economic growth.
For starters, high-tech companies in China's stock market stand out for their strong profitability compared with traditional industries. In the first three quarters, firms listed on the ChiNext board posted revenues of 3.25 trillion yuan with net profits of 244.7 billion yuan and firms listed on STAR Market posted revenues of 1.01 trillion yuan with net profits of 44.1 billion yuan. Companies on the ChiNext board recorded revenue and profit growth of more than 10 percent, according to the Economic Daily.
The growing capacity to create value underscores how new growth drivers are taking shape in China's transition toward high-quality development. These figures align with the broader trend of structural improvement seen in the country's industrial output and foreign trade this year. Together, they point to rising investment efficiency in the Chinese economy - a strong rebuttal to ill-intentioned, pessimistic claims.
The growing dominance of sectors such as electronics, semiconductors, and information technology reflects rising investor confidence in the real economy's capacity for innovation and upgrading. Confronted with external technological blockades and containment, China's tech companies are accelerating their growth, increasingly emerging as a new pillar of confidence for the nation's economy.
One of the most eye-catching stocks in China this year has been semiconductor firm Cambricon, whose share price has soared past the 1,000-yuan mark - even surpassing distiller Kweichow Moutai at one point - making it the market's most expensive stock and a symbol of the country's tech-driven momentum.
This case perfectly illustrates the strengthening trend of a more efficient allocation of capital. Funds are increasingly flowing toward areas with stronger productivity potential and long-term competitiveness, rather than traditional sectors dependent on scale or leverage. The result is a capital market that better reflects the evolving drivers of China's growth - innovation, digitalization, and green transformation.
Cambricon's rise is by no means an isolated phenomenon related to a single company or industry, but a systemic shift occurring across China's economy as a whole. It is far from a short-term trend; rather, it is driven by factors that support sustained growth and continuous improvement.
Multiple factors underpin this systemic shift. First, innovation is accelerating across China's high-tech sectors. Companies are investing heavily in research and development, producing advanced chips, semiconductors, and artificial intelligence applications that enhance productivity and global competitiveness.
Second, policy support and industrial strategy provide a stable framework for growth. Government initiatives, including subsidies, tax incentives, and strategic guidance, are creating an ecosystem that nurtures innovation-driven enterprises and encourages capital allocation toward high-value industries.
Third, a self-reinforcing virtuous cycle between investment and technology-driven sectors is gaining momentum. Investors increasingly recognize the long-term potential of high-tech firms, driving capital inflows and boosting stock valuations, which in turn enhance these companies' ability to expand and innovate. Strong profitability has also delivered substantial returns for investors, further reinforcing this cycle.
From a macro perspective, the rise in "tech content" marks a qualitative leap in China's economic development model. It suggests that the foundation of growth is becoming more resilient and value-oriented. As technology continues to integrate with manufacturing, finance, and services, China's economy is building a stronger engine for sustainable expansion - one powered not by sheer size, but by innovation and efficiency.