A view of Tencent’s future headquarters, still under construction, in Shenzhen
Tencent Holdings Ltd. has surpassed China Mobile Ltd. to become the country’s most valuable corporation, underscoring the growing importance of a vibrant private economy over lumbering state-owned enterprise.
Tencent rose 4.2 percent to HKD210.20 in Hong Kong yesterday, reaching a market value of HKD1.99 trillion USD256.6 billion), edging past China Mobile’s HKD1.97 trillion and putting the tech company in the ranks of the world’s 10 largest public companies, including Apple Inc. and Alphabet Inc. Tencent’s shares have jumped four-fold in as many years by building a lead in mobile gaming and online advertising, surpassing a roughly 20 percent advance in the Hang Seng Index.
The company’s rise exemplifies the new realities of the world’s second largest economy, where smokestack industries prepare to lay off workers while younger companies such as e-commerce giant Alibaba Group Holding Ltd. make inroads into everything from finance to media. Private businesses, marginalized for decades by a state sector that enjoyed easy funding from government-owned banks, now play a pivotal role in hiring and innovation, and the best performers are spearheading China’s shift toward a consumption-led economy.
“China’s economic restructuring is happening faster than many have expected,” said Shen Jianguang, chief Asia economist for Mizuho Securities Asia Ltd.
Services accounted for more than half of output last year for the first time, while consumption made up more than 70 percent of the expansion in the first half of this year. The rise of companies such as Tencent shows China can unlock still more of its growth potential by giving more market access to private companies and rolling back state monopolies, he said.
Since 2006, the title of China’s most valuable company has been held mainly by government-controlled industrial heavyweights such as China Mobile, Industrial & Commercial Bank of China Ltd. or PetroChina Ltd., according to data compiled by Bloomberg. Tencent arch-foe Alibaba also briefly held the title just after its 2014 debut. Bloomberg
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