S&P 500's Risk-Adjusted Returns Outperform China's SSE Composite by Over 20-Fold Since 2004

A recent social media post by Kyle Pomerleau has prompted a reevaluation of prevailing economic narratives, suggesting that a closer look at the performance of the S&P 500 and China's SSE Composite Index challenges the notion that the U.S. economy is "worse off than in 2009" and that China is an "economic powerhouse." Pomerleau stated in his tweet, "> Perhaps this little fact about the SSE and SP500 should encourage you to reevaluate your belief that the US is worse off than in 2009 and that China is some sort of economic powerhouse." This assertion highlights a significant divergence in the risk-adjusted performance of the two major stock markets over the past decade and a half.

Following the 2008 financial crisis, the U.S. stock market, as represented by the S&P 500, embarked on its longest bull run in history, surging approximately 330% over the subsequent decade until 2020. This sustained growth period indicates a robust recovery and expansion of the American economy. While the COVID-19 pandemic briefly interrupted this trajectory in 2020, the market quickly rebounded, reaching new record highs by 2021.

Academic research further substantiates this performance disparity. A 2022 study by Joao Filipe Gouveia, comparing the S&P 500 and SSE Composite from 2004 to 2021, found that the U.S. market index demonstrated significantly higher risk-adjusted returns. For the entire period, the S&P 500 recorded a historical Sharpe Ratio of 74.13, dramatically outperforming the SSE Composite's 3.52. This indicates that the S&P 500 delivered substantially higher returns for a given level of risk, coupled with lower volatility compared to its Chinese counterpart.

Despite China's rapid ascent to become the world's second-largest economy by GDP since 2010, its stock market has exhibited greater volatility and, on a risk-adjusted basis, lower returns than the U.S. market. While the Shanghai Composite has shown periods of strong growth, including a 35.74% year-on-year increase as of late August 2025, its overall long-term risk-adjusted performance has not matched that of the S&P 500. Volatility shocks from the Chinese market have also been observed to negatively impact the U.S. market, particularly during periods like the COVID-19 pandemic, although the U.S. market has generally shown resilience.

The comparative data underscores the nuanced reality of global economic powerhouses. While China's economic scale is undeniable, the long-term, risk-adjusted performance of the U.S. stock market, as evidenced by the S&P 500, presents a compelling counter-narrative to perceptions of its decline and offers a different perspective on investment stability and growth.