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Comment by RC_ITR | Hacker News Reader

The interesting counterpoint to this, though, is that China is less concentrated in spots 1-5, but way more concentrated comparing the Top 5 vs. the rest.

Among Internet brands, the classic $100bn+ market cap companies of Tencent/Alibaba/Meituan/PDD/JD/Bytedance are followed by Baidu/Kuaishou both around $30bn and then not many other meaningful names.

Compare this to the US where Google/Amazon/PayPal/Netflix/Facebook/Booking.com/Airbnb/Uber/Square/eBay/DoorDash/Zoom form a much smoother distribution, probably because the scaling advantages of US app stores.

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That's because all the top companies in any sector in China are subsidized and heavily supported by the government. The distribution isn't as organic, it's more a matter of in China, crossing the threshold to being the "golden child" and being guaranteed success right after.

"That's because all the top companies in any sector in China are subsidized and heavily supported by the government."

How? Favorable regulatory environment? Cash payments/subsidies?

In a corrupt enough society they can just go after the competitors with bogus legal claims.

Lovely handwavey truism but that doesn't do anything to explain the actual mechanism at work here.

I'm not sure where you guys are coming from, but the top officials of China acknowledges this is an issue. Are you saying that they are wrong and that China doesn't have a huge problem with corrupt officials? Or why else are you questioning these things?

https://www.forbes.com/sites/ralphjennings/2018/03/15/corrup...

In fairness accusations of corruption to remove political opponents or "troublemakers" have a long and storied history of application by genocidal dictatorships like China, democracies, and basically every form of government.

So merely having an accusation doesn't really say much.

Like patent trolling?

I don't know enough to support their extreme position, but for the sake of information:

Part of it is state-owned banks (the dominant form of banking in China) offering attractive lending to state-owned enterprises, as loan officers avoid the risk of being accused of corruption.

Also, there likely is/was more direct encouragement of exporters (e.g. by subsidies), similar to other countries, but my source doesn't specify if this currently applies to China.

Source: Fault Lines: How Hidden Fractures Still Threaten the World Economy (2010)

None of the top Chinese tech companies are state-owned. Also 2010 was before Xi Jinping. Things have changed a lot now. Now they get striked left and right by regulations. Just look at their stock price.

Based in Beijing. This is not true.

From what I know about how things work, the argument makes sense. Just denying won't cut it. You need to propose an alternative view. I am willing to listen.

Serious and thoughtful question here, since this may sound flippant -

Could the Apple ecosystem of devices be the factor that enables the distribution of market caps? (Very interesting point, by the way)

I wonder if it explains the somewhat odd gap in the middle of the China market cap distribution, since Android absolutely dominates the China market at the tail end and Apple dominates at the high end.

Apple conflates their walled garden with the high perceived value of their devices, which I'm intentionally ignoring for the purpose of this question.

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