The mainland and Hong Kong capital market interconnection celebrates its tenth anniversary:
Wonderful ten years to create a high-level open sample of the capital market
China Fund News reporter Fang Li Zhang Yanbei
Ten years have passed!
On November 17, 2014, the Shanghai-Hong Kong stock trading interconnection mechanism was officially launched. At that time, the "ring of the gong" not only created a new model of capital market opening, but also became an important milestone in the opening of the capital market.
After ten years of exploration, the innovation of the interconnection system has yielded fruitful results: investment targets are constantly enriched. As of the end of September 2024, there are more than 3,300 eligible stocks under the Shanghai-Shenzhen-Hong Kong Stock Connect, covering 50% of the total market value of listed companies in the Shanghai-Shenzhen-Hong Kong markets. 90%, accounting for more than 80% of the transaction volume. At the same time, Shanghai-Hong Kong Stock Connect, Shenzhen-Hong Kong Stock Connect, ETF Connect, Bond Connect, and Swap Connect are gradually implemented, bringing more diversified products.
Domestic and foreign investors have become increasingly involved, and market activity has increased significantly. The total market value of securities assets held by mainland investors through Southbound Trading exceeded HK$3.3 trillion, more than 200 times that at the end of 2014. The average daily turnover of northbound and southbound transactions was 123.3 billion yuan and 38.3 billion Hong Kong dollars respectively, an increase of 21 times and 40 times respectively compared with the first month of operation in 2014.
attracts global capital to China and opens the capital market to the outside world at a high level. The total securities assets held by foreign investors in mainland China are nearly 7.6 trillion yuan, and the total market value of securities assets held by mainland investors through Southbound Trading exceeds HK$3.3 trillion, which is more than 200 times that at the end of 2014.
's journey has been going on for thousands of miles, and the important task has already begun. Industry insiders said that the interconnection mechanism is a far-reaching financial initiative that has brought profound changes to the capital market structure and investment behavior of the two places, and has become an important force in promoting the opening up of China's capital market. Looking to the future, the interconnection mechanism will continue to deepen its development and promote the prosperity of my country's financial market.
Capital market interconnection has been promoted in depth
Ten years of fruitful results
On the occasion of the 10th anniversary of the interconnection mechanism, Hong Kong Exchange recently released the "White Paper on the 10th Anniversary of Capital Market Interconnection between the Mainland and Hong Kong" (hereinafter referred to as the "White Paper") ), demonstrating that as the world's first two-way open capital market model, the interconnection has achieved fruitful results in the tenth anniversary of its opening.
Capital market interconnection is advancing in depth, and interconnection targets are constantly enriched. Data shows that as of the end of September 2024, there are more than 3,300 eligible stocks under the Shanghai-Shenzhen-Hong Kong Stock Connect, covering 90% of the total market value of listed companies on the Shanghai-Shenzhen-Hong Kong markets and more than 80% of the transaction scale. With the inclusion of companies with different voting rights structures in Hong Kong stocks, biotech companies, foreign companies, and companies on the Shanghai Stock Exchange's Science and Technology Innovation Board, the eligible stocks for Shanghai-Shenzhen-Hong Kong Stock Connect have become more diversified, allowing domestic and foreign investors to more flexibly allocate assets and enjoy the two markets. Bonuses provide convenience.
In this regard, Huang Liang, senior strategist of China Merchants Fund, said that investors’ participation in interconnection continues to deepen. Mainland investors can invest in some relatively scarce A-share stocks through the Hong Kong Stock Connect business, and foreign investors can also invest through the Shanghai and Shenzhen Stock Connect business. For high-quality Chinese assets, the current foreign shareholding ratio of A-shares is still low compared to international mature markets. International investors are still expected to use this mechanism to increase their presence in the future.
Taikang Fund Equity Fund Manager Huang Chengyang also believes that the interconnection mechanism is a far-reaching financial initiative, which provides great convenience for international investors to enter the A-share market and domestic investors to invest overseas. Over the past decade, Stock Connect has steadily expanded from stocks to asset classes such as bonds, exchange-traded funds (ETFs) and interest rate swaps, and has become an important channel for domestic and foreign investors to safely and conveniently carry out cross-border investment and risk management. Luo Guoqing, head of the index investment department of
Guangfa Fund, concluded that the interconnection of the financial markets between the mainland and Hong Kong is a vivid manifestation of my country's orderly expansion of high-level financial opening up, especially the "Shanghai-Hong Kong Stock Connect", "Shenzhen-Hong Kong Stock Connect", "Bond Connect" and "ETF" The successive launches of "Incorporating Interoperability" have played a positive role in promoting the integration and development of the financial markets of the two places.
First of all, the interconnection mechanism realizes the exchange of stock resources between the two places, allowing more high-quality listed companies to be discovered by cross-market investors and priced reasonably. This helps to fully utilize the price discovery function of the capital market and enhance the efficiency of the two places. The international competitiveness of the market will also help promote the common development of the two economies. Secondly, companies subject to interconnection need to be subject to supervision in both places, which requires regulatory agencies in both places to strengthen communication and collaboration, which will help jointly maintain the stability of China's capital market and enhance the international credibility and influence of the two places' markets. In addition, for investors, investors in the two places can share more investment opportunities through the interconnection mechanism, which not only provides investors with more investment choices and opportunities, achieves diversified allocation of assets, but also promotes the market development of the two places. liquidity and improve investment efficiency.
Participation in interconnection continues to deepen
Asset scale grows steadily
The "White Paper" shows that with the optimization of the transaction settlement mechanism, the transaction activity of Shanghai-Shenzhen-Hong Kong Stock Connect has steadily increased. In the first three quarters of 2024, the average daily turnover of northbound and southbound transactions was 123.3 billion yuan and 38.3 billion Hong Kong dollars respectively, an increase of 21 times and 40 times respectively compared with the first month of operation 10 years ago.
Dacheng International introduced that in the first three quarters of 2024, the total inflow of Hong Kong Stock Connect was 121.1 billion yuan, with an average daily inflow of 1.99 billion yuan. The influence of southbound funds on Hong Kong stocks, especially those familiar to some domestic investors, is gradually increasing, effectively improving the liquidity of the Hong Kong stock market. Sixty-seven percent of the targets in the Hong Kong stock market are domestically listed companies, and this part of the funds also brings long-term funds to the market.
Domestic and foreign investors have become increasingly involved, and the scale of assets has grown steadily. The "White Paper" shows that with the steady development of Shanghai-Shenzhen-Hong Kong Stock Connect, more and more mainland investors are conducting cross-border investment allocation through Southbound Stock Connect. As of September 2024, the total market value of securities assets held by mainland investors through Southbound Trading exceeded HK$3.3 trillion, more than 200 times that at the end of 2014.
The implementation and continuous optimization of Shanghai-Shenzhen-Hong Kong Stock Connect and Bond Connect have also greatly enhanced the international attractiveness of China's capital market, promoting the inclusion of A-shares and government bonds into mainstream global indices, attracting more foreign investors. At the same time, index inclusion has also attracted more foreign investors to increase their allocation of Chinese assets.
data shows that as of September 2024, the total amount of mainland China securities assets (including stocks and bonds) held by foreign investors is nearly 7.6 trillion yuan. Compared with June 2018, when MSCI first included A-shares, the growth exceeded 4.7 trillion yuan. Among them, the total value of A-shares held by northbound funds under the Shanghai-Shenzhen-Hong Kong Stock Connect is about 2.4 trillion yuan, accounting for 77% of the total domestic stock assets held by foreign investors; the total scale of Chinese bonds held by foreign investors exceeds 4.4 trillion yuan The RMB has increased by approximately 144% compared with before it was included in the global mainstream bond index for the first time.
Promote the development of cross-border business of securities institutions in the two places
"White Paper" data shows that as of September 2024, more than 260 Hong Kong brokers have participated in the Shanghai-Shenzhen Stock Connect business, and more than 100 mainland securities companies have launched the Hong Kong Stock Connect business. The Shanghai-Shenzhen-Hong Kong Stock Connect business has become an important business component of securities operating institutions in both places. In order to meet the cross-border investment needs of mainland investors, the coverage and publication frequency of research reports tracking Hong Kong listed companies have been significantly expanded and improved. Regarding the specific business of
, Boshi International said that interconnection allows financial institutions in the two places to break through quota restrictions (qdii/qfii) and invest in each other's markets more conveniently, which will be of great help in promoting cross-border investment business. From the perspective of domestic institutions, on the one hand, the interconnection has promoted the development of Hong Kong stock QDII products and Shanghai-Shenzhen-Hong Kong equity fund products, broadening the scope of strategies. On the other hand, the interconnection has "freed up" QDII quotas for fund companies, giving them This provides fund companies with more possibilities for innovation.
Huang Liang pointed out that for financial institutions in Hong Kong and the Mainland, banks, securities firms and funds in the two places play a role in cross-border business and can provide more convenient investment and financial services to institutional and individual investors.
“The Shanghai-Shenzhen-Hong Kong Stock Connect has brought new opportunities to the brokerage business of securities firms in both places.For example, the vast majority of mainland securities firms now have stock exchange trading qualifications, and mainland securities companies have also regarded Shanghai-Shenzhen-Hong Kong Stock Connect as one of their key businesses in business development, which has accelerated the investment education level of mainland investors in the business. " Huang Liang said.
Promote the internationalization of the RMB
As another important milestone in interconnection, the launch of Bond Connect connects international investors with China's rapidly growing fixed income securities market, while promoting the orderly opening of China's bond market. , also led to Hong Kong’s offshore RMB The development of the market ecosystem.
"White Paper" data shows that in just a few years, the average daily trading volume of Bond Connect's "Northbound Trading" has increased from 1.5 billion yuan in the first month of opening to 43.9 billion yuan in the first nine months of 2024. RMB; more than half of the transactions of international investors investing in the mainland bond market are through bonds. With the launch of Bond Connect, the "Northbound Connect" of Bond Connect has become the main channel for international capital to invest in Chinese bonds.
In addition, Swap Connect, as an innovative measure to connect the mainland and Hong Kong over-the-counter derivatives markets, collaborates with Bond Connect to provide foreign investors with opportunities. Provide convenient and efficient RMB asset risk management tools. As of the end of September 2024, the Northbound Swap Connect will attract investors. 65 overseas institutions have entered the market, and the monthly average daily transaction nominal principal has increased from approximately 3 billion yuan in the first month of launch to nearly 18 billion yuan, and the transaction scale has increased several times.
"In the past, the Hong Kong offshore market has grown rapidly. The use scenarios of RMB are mainly concentrated in trade settlement scenarios, and most of the RMB in the hands of residents is deposited in deposits and savings. "A person from Dacheng International said that since the main cross-border capital flows of Shanghai-Shenzhen-Hong Kong Stock Connect are mainly conducted in RMB, the main RMB exchange also occurs on the offshore RMB side of Hong Kong, which effectively reduces the onshore RMB exchange rate and also increases the offshore RMB exchange rate in Hong Kong. Investment development in the RMB market. If the Hong Kong dollar-RMB stock dual counter business launched by the Hong Kong Stock Exchange last year can be further integrated into the Shanghai-Shenzhen-Hong Kong Stock Connect mechanism, it is expected to have great development potential. While effectively increasing the trading volume of RMB-denominated stocks, it is expected to promote the stable exchange and efficient flow of offshore and onshore RMB, and promote the further internationalization of RMB.
Boshi International predicts that with the deepening of interconnection mechanisms, Vietnam will More and more RMB-denominated and settled investment products will enter the horizons of global investors, providing international investors with more diversified asset allocation tools, thus Continuously enhance the recognition and attractiveness of the RMB and accelerate the internationalization process of the RMB.
Innovation and cooperation are two-wheel drive.
Interconnection is expected to usher in new prosperity.
On April 19, 2024, the China Securities Regulatory Commission issued 5 measures. Further expand and optimize Shanghai, Shenzhen and Hong Kong The interconnection mechanism will help Hong Kong consolidate and enhance its status as an international financial center and jointly promote the coordinated development of the capital markets of the two places. The series of opening up actions have made all market participants excited. The interviewed institutions and people said that the future development of the interconnection mechanism is full of opportunities. The possibilities are endless.
“Promoting China’s capital market to open to a higher level and realizing the internationalization of the RMB are the long-term strategic goals of China’s financial sector. The successful operation and continuous optimization of the interconnection mechanism will help enhance Hong Kong’s status as an international financial center and promote the coordinated development of the capital markets of the two places. "Bosera International stated that the five measures issued by the China Securities Regulatory Commission will further expand the Shanghai-Shenzhen-Hong Kong Stock Connect mechanism and bring more development opportunities to the capital market.
Bosera International stated that based on the consensus that the interconnection mechanism has great potential for future development, It is expected that the continuous optimization of mechanisms and the improvement of convenience and efficiency of infrastructure will make the connection between the capital markets of the two places more efficient and low-cost; it is expected that interconnection can improve product ecology, trading mechanisms and services. There will be more innovations in aspects such as investor education, risk management and data sharing.
CSOP Deputy Chief Operating Officer Wang Chen also expects that the interconnection mechanism will become a long-term and normalized mechanism in the future, covering more financial sectors. Products and services provide investors with more investment options. At the same time, it is also expected that more financial institutions and investors will participate in the interconnection mechanism to make the capital market more active and diversified.With the continuous improvement of various mechanisms, it is believed that the interconnection mechanism will better serve investors in future development and continue to promote the development and prosperity of my country's financial market.
Dacheng International is concerned about the listing interoperability of unlisted trading products and the improvement of capital interest rate efficiency. They believe that the interconnection business has become a successful cross-border investment model and is expected to be replicated in more investment tools and targets in the future, such as public funds. This will help financial institutions reduce costs and participate more broadly in cross-border investments. At the same time, optimizing the margin occupation and fund settlement cycle will further enhance the investment management effect and improve the efficiency of fund use.
"The interconnection system arrangement has a history of ten years, and the targets have been further expanded from stocks to ETFs. In the context of a high level of opening up of the capital market, further innovation and expansion in the types of interconnection targets may be possible in the future, such as derivatives and leverage ETFs and other domestic scarce stocks At the same time, domestic asset management institutions will be more motivated to participate in global competition, conduct further in-depth research on target selection, index compilation, strategic innovation, etc., and provide investors with more high-quality instrumental products. " said Le Wuqiong, fund manager of the Index and Quantitative Investment Department of China Universal Fund.
In the process of promoting the development of interconnection mechanisms, innovation and cooperation are two indispensable elements. In particular, Luo Guoqing pointed out that in addition to further enriching financial products and simplifying transaction processes, we should also actively carry out capital market cooperation with other countries and regions to promote the cross-border flow of capital, technology, information and other elements. For example, closer cooperation can be established with mature markets such as Europe and the United States to share market information and regulatory experience. This will help enhance the prosperity and development of global capital markets.
The tenth anniversary of the opening of the interconnection between the mainland and Hong Kong
Injecting new vitality into the capital markets of the two places
China Fund News reporters Lu Huijing and Cao Wenjing
On November 17, the interconnection ushered in an important milestone of the tenth anniversary of the opening.
The "White Paper on the Tenth Anniversary of Capital Market Connectivity between the Mainland and Hong Kong" released by the Hong Kong Exchange shows that over the past ten years, the Connectivity has achieved remarkable results in multiple dimensions such as product coverage, transaction settlement mechanisms, and investor participation. It has not only provided Domestic and foreign investment It provides more convenient and efficient cross-border asset allocation channels, and also injects new liquidity and vitality into the capital markets of the two places. It also improves the investability and internationalization of China's capital market, enhances the market resilience of the two places and strengthens Hong Kong's It has played an important role in establishing the hub status of offshore RMB business.
Looking forward to the future, many industry insiders believe that the variety of interconnections is expected to gradually enrich, and products such as REITs are expected to be included. At the same time, it will attract more international investors and consolidate Hong Kong's leading position as an international financial center.
Creating a new model for cross-border securities investment
The interconnection between the Mainland and Hong Kong marks the tenth anniversary of its opening. In the past ten years, the interconnection mechanism has played an important role in changing the investment ecology of the capital markets of the two places and increasing market diversity. Luo Guoqing, head of the Index Investment Department of
Guangfa Fund, recalled that from the listing of A+H shares to the successive opening of Shanghai-Shenzhen-Hong Kong Stock Connect, the mainland and Hong Kong markets have created a new model of cross-border securities investment.
In this process, the two-way flow of funds gradually increased, and the Hong Kong market became an important window for all parties to meet. Throughout the development process of the two-way interconnection mechanism, we can find that its interconnection targets are gradually expanding, and the investor structure focuses on attracting long-term institutional investors such as qfii first, and then introducing individual investors. This step-by-step interconnection has Help control risks in my country's capital market.
Specifically, the varieties and scope of interconnection continue to expand and optimize. The varieties have also gradually expanded from the initial stock trading interconnection to bonds, futures, funds, especially ETFs and other fields, and have successively provided investors with more Rich investment options. Since the opening of
interconnection, the value of Hong Kong stocks held by mainland institutional investors has also increased significantly.Huang Liang, a senior strategist at China Merchants Fund, quoted a set of data: Since 2015, mainland public funds, insurance funds, annuity funds, etc. have successively obtained the qualifications for Southbound Trading, and the allocation of overseas assets for medium and long-term funds has become normal. It has stimulated the enthusiasm of mainland investors to participate in the Hong Kong securities market. The total market value of securities assets held through Southbound Trading currently exceeds HK$3.3 trillion.
"Interconnection also allows international investors to further invest in China's capital market, which in turn has played a role in promoting the inclusion of my country's A-shares and treasury bonds in global mainstream indices such as MSCI and FTSE Russell. These indices have also allowed more overseas investors to increase their allocations. High-quality Chinese assets currently. We have many fund managers with global vision who have allocated high-quality Hong Kong stock targets in their portfolios. These companies can not only enjoy the advantages of mature Hong Kong capital market resources and financial instruments, but also have deep roots in the mainland, benefit from the mainland's vigorous development, and have greater potential in the future. Good room for growth." Huang Liang further analyzed.
Relevant people from Boshi International also mentioned the impact of interconnection on fund investment portfolios. In his view, the interconnection mechanism is conducive to managers to fully explore the characteristics of different markets, span different investment fields, diversify investment varieties, and more accurately meet the needs of investors. It has unique advantages.
"Interconnection effectively reduces the difficulty and cost of fund investment portfolios participating in cross-border markets. At the same time, because the interconnection targets have certain screening criteria for access, it can also set certain prerequisite screenings for the risk management of the portfolio, and the target Better liquidity can also support the allocation needs and investment efficiency of larger portfolios." Dacheng International expressed a similar view. It is only two years since
multi-dimensionally deepened the interconnection mechanism.
etf was included in the interconnection mechanism, but it reflects the acceleration of accumulation in interconnection. Data shows that as of the end of June 2024, since the opening of etf.com, more than 150 products have been included in the list across the market, and the cumulative transaction amount in the north-south direction has exceeded one trillion yuan. In July, etftong achieved further expansion, and transactions continued to be hot.
Many industry insiders said that looking forward to the future, they look forward to further lowering the threshold for interconnection and inclusiveness. They also look forward to the timely adjustment and participation of some newly listed companies and companies with the same shares and different rights, as well as to achieve more consistency with the domestic market in the holiday system. , allowing investors to share more policy dividends.
Boshi International said that in the future, it expects ETF Connect to continue to broaden the scope of products that can be included in the southbound trade, and will include investments in overseas stocks, bonds, REITs, and global commodity ETFs. In this regard, Boshi International recommends that we continue to optimize ETF infrastructure, improve transaction and settlement mechanisms, enhance financial technology capabilities and digitalization levels, and further improve market operation efficiency and reduce costs.
Dacheng International pointed out that the access requirements for ETF interconnection are still relatively strict. Taking into account the history of ETF issuance in the Hong Kong market, the strength of Chinese issuers and market liquidity, adjustments can be made according to the specific conditions of different markets and the requirements can be moderately reduced. Secondly, under the guidance of the early successful cases of ETF interconnection, the exchanges covered can be further expanded to enhance the influence of Chinese assets overseas while effectively enriching the overseas market allocation and investment tools of domestic investors.
"At present, various interconnection projects have been running smoothly for many years and have become a very important part of the capital markets of the two places. In the future, we are willing to work with all parties involved to continuously improve supporting measures and actively invest technical resources to ensure the implementation of the interconnection mechanism. Receive efficient and stable technical support." Wang Chen, deputy chief operating officer of CSOP, emphasized that he will continue to attach great importance to investor education and service, and while implementing the interconnection mechanism, ensure that the rights and interests of investors are fully protected and provide high-quality services. services and investment education support.
In the future, the impact of interconnection will be multi-faceted and multi-level.Huang Chengyang, stock fund manager of Taikang Fund, pointed out that for investors, it goes without saying that it increases investment channels and provides investment convenience; for listed companies, in addition to considering global layout in business, in terms of investor structure It has also been greatly enriched, increasing opportunities for communication with global investment promotion, and at the same time increasing the need to improve corporate governance and transparency.
Huang Chengyang said frankly that as domestic institutional investors, we have a particularly profound experience. We are both happy and encouraged that many excellent Hong Kong stocks have been added to the investable targets, but we are also worried about making investment decisions under the high volatility characteristics of Hong Kong stocks. This drives us It is necessary to not only grasp the macro and micro fundamentals, but also carefully study and analyze the pricing rules of Hong Kong stocks, and continue to increase communication with foreign investment institutions. For our peers in the A-share market, I believe we can all feel the impact of overseas funds on the long-term pricing rules of A-shares. Luo Guoqing, head of the index investment department of
Guangfa Fund, also believes that ETF interconnection is not only an important tool for foreign investors to invest in A-shares, but also an important part of the high-level two-way opening of my country's capital market. The continued expansion of the Internet will further enrich the product choices for investors in different markets and facilitate investors' diversified asset allocation in the Hong Kong and mainland markets. For ETF products themselves, the inclusion of interconnection will help enrich the ETF investor group, and is expected to bring incremental funds from different markets and increase market activity and product liquidity.
Milestone moment of the 10th anniversary
Hong Kong Financial Secretary made a major statement
China Fund News reporter Zhang Yanbei
On the occasion of the 10th anniversary of the launch of the "interconnection" of the financial markets between the mainland and Hong Kong, on November 17, Hong Kong Financial Secretary Paul Chan Mo-po issued a statement Blog. The following is the original text:
Ten years ago today, the interconnection of the financial markets between the mainland and Hong Kong was officially launched. This institutional innovation promoted the two-way flow of capital between the mainland and the world, allowing international investors to directly and conveniently invest in the mainland market through Hong Kong. Share the achievements of the mainland's economic development, and also allow mainland investors to use Hong Kong to conveniently allocate overseas assets to achieve mutual benefit and win-win results. The
interconnection arrangement has shown strong vitality under the principles of respecting local market rules, being compatible with cross-border investment needs, and ensuring risk control. China Unicom content has been continuously enriched and the scope of products covered has continued to expand. It has developed from stocks, bonds, and investment products under the Cross-border Wealth Management Connect to exchange-traded funds (ETFs) and derivatives for risk management; it has also recently announced the inclusion of real estate investment trust funds (REITs). The interconnected development between Hong Kong and the mainland market continues to improve, making Hong Kong's unique role in the international market more prominent and attractive.
Looking at the numbers, expansion and deepening
In the past ten years, in terms of stock market interconnection, the number of eligible stocks has increased from a total of more than 800 in the initial Shanghai-Hong Kong Stock Connect to a total of more than 3,300 in the current Shanghai-Shenzhen-Hong Kong Stock Connect, accounting for three places 90% of the total market capitalization of listed companies.
Mainland investors trade southbound Hong Kong stocks. In the first three quarters of this year, the average daily trading volume reached 38 billion yuan, an increase of 40 times compared with the first month of Shanghai-Hong Kong Stock Connect in 2014, and accounted for 16.9% of the total trading volume of the Hong Kong stock market. %. In fact, the Southbound Stock Connect has become an important channel for mainland public funds, insurance funds, annuity funds and other long-term funds to allocate overseas assets. The market value of assets held by mainland investors through Southbound Stock Connect has exceeded HK$3.3 trillion.
As for the northbound trading of mainland stocks by foreign investors through Hong Kong, the average daily trading volume in the first three quarters of this year reached 123 billion yuan, an increase of 21 times from the first month of operation ten years ago, accounting for 6.7% of the total trading volume in the mainland market. It is worth pointing out that currently, about 77% of the total value of mainland stocks held by foreign investors is held via the Northbound Stock Exchange. At the same time, approximately two-thirds of international investors’ cross-border bond transactions have been conducted through Bond Connect. It can be said that with the help of interconnection, Hong Kong has become the first choice for international capital allocation and trading of mainland financial products.
interconnection has been steadily deepened and expanded over the past decade, allowing the financial markets of the two places to develop in tandem.The total market value of the Hong Kong stock market has reached HK$35 trillion so far, an increase of about 40% from ten years ago and 11 times the GDP of the country. Since the beginning of this year, relevant mainland ministries and commissions have launched a series of measures that are beneficial to the development of the economy and financial markets. In October, the average daily trading volume of Hong Kong stocks reached HK$255 billion. In addition to greatly enhancing the liquidity and vitality of Hong Kong's capital market, interconnection also consolidates and enhances Hong Kong's competitiveness and status as an international financial center, and at the same time helps the mainland's capital market continue to open steadily while risks are controllable.
Thinking about the future
Summarizing the experience of the ten years of interconnection, in the future we need to continue to focus on three main axes to promote the further development of interconnection.
First, continue to develop interconnection as a link between the mainland and international markets. That is to say, in addition to connecting the traditional European and American markets, we must also connect with emerging markets with large populations, rapid economic and income growth, and meet the diversified asset allocation needs of international and mainland investors. In this regard, Hong Kong is working hard to strengthen its connections with global southern markets, including striving for more high-quality local companies to be listed in Hong Kong and launching more cross-border investment products, so that all parties can achieve more mutual benefits and win-win results on Hong Kong as a connection platform. In the past year, ETFs listed in Hong Kong to invest in Saudi Arabia, and ETFs listed in Saudi Arabia to invest in Hong Kong, are one example.
Second, continue to promote the deepening and expansion of interconnection, so that Hong Kong can better play its role as a firewall, experimental field and capital leading platform in the process of opening up and developing the national financial market. The country is making every effort to promote the construction of a financial power, actively deepen the reform of the financial system, and promote high-level opening up to the outside world. On the basis of interconnection, we will further enrich product categories, expand the scope of targets, continue to promote various policy and product innovations under controllable risks, and contribute to national development.
Third, make good use of the unique advantage of interconnection to help steadily and prudently promote the internationalization of the RMB. In the past few years, the changes from Bond Connect to Swap Connect, and even the promotion of RMB stock trading desks to be included in Southbound Trading, have helped enrich the types of offshore RMB investment products and risk management, giving offshore RMB holders more investment options and risk management tool, which will help promote more investment and trade to be settled in RMB and increase the share of RMB as a reserve currency.
editor: Xiaomo
review: Muyu
