Shanghai-Hong Kong Stock Connect was launched on 17 November 2014, opening a bridge for two-way traffic between the securities markets of Mainland China and Hong Kong. This innovative, creative and pioneering initiative allowed investors to use local brokerages to buy and sell eligible stocks in cross-border markets through local exchanges and clearing houses, establishing a new model of mutual market access.
With the launch of Shenzhen-Hong Kong Stock Connect, Bond Connect, and Swap Connect over the next decade, the Connect programmes have expanded from stocks to bonds, exchange-traded funds (ETFs), and interest rate swaps, establishing a safe and convenient channel for Mainland Chinese and international investors to conduct cross-border investment and risk management.
The smooth operation and continuous optimisation of Connect programmes has created a successful paradigm for multi-level connectivity between China and international financial markets in terms of systems, products, and services, while growing product diversity, trading volumes and investor participation.
Despite the complexity of the global financial environment, the success of the Connect programmes has expanded the depth and breadth of China’s capital market openness and strengthened Hong Kong’s superconnector status, enhancing the vitality and resilience of Hong Kong’s capital markets and consolidating its status as an international financial centre.
In April 2024, the State Council of China issued “Several Opinions on Strengthening Supervision and Risk Prevention and Promoting the High-quality Development of the Capital Market” (named as “New Nine Articles”).
This document highlighted the need for expanding and optimising the cross-border interconnection mechanism of the capital market, setting the direction for the future development of mutual market access between Mainland China and Hong Kong.
This report reviews the development of the Connect programmes over the past decade, analyses the main drivers behind their success, and identifies ways to further enhance the Connect programmes in the future.
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