China has overtaken Japan to become the world's second- biggest stock market by capitalisation in dollar terms as investors increase their exposure to the fast-growing economy.

China's listed companies had a market capitalisation of $3,210bn as of July 15 compared with Japan's $3,200bn, according to Bloomberg data. It is the first time China's stock market has exceeded Japan's since January 2008, the data showed.

The positions may have edged the other way in yesterday's trading after the Shanghai market slipped back. But investors have driven the Shanghai and Shenzhen markets up 75 per cent and 95 per cent respectively this year, thanks to the Chinese government's $590bn stimulus plan, the effect of which was reflected in the faster-than- expected 7.9 per cent second-quarter economic growth. The two Chinese stock markets are among the best performers globally this year.