Mainland Chinese companies will use Hong Kong’s capital market as the launch pad for their global growth, according to an action plan signed on Wednesday with Shanghai to connect the premier onshore commercial city with the nation’s offshore financial hub.
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The two cities will expand the decade-old connect programme linking the stock markets of Shanghai and Hong Kong with more equities, bonds, exchange-traded funds (ETFs) and gold, as well as working on cross-border settlements and uses of the digital yuan, according to the agreement signed at the annual Lujiazui Forum in Shanghai.
“Shanghai and Hong Kong are international financial centres and have always played an important role in the country’s financial reforms,” Hong Kong’s Financial Secretary Paul Chan Mo-po said after signing the plan with Shanghai’s executive vice mayor Wu Wei. “The plan further clarifies the specific direction of cooperation between Shanghai and Hong Kong, and injects new and richer content into the multilevel and multi-field financial cooperation between the two cities. It is a new measure to deepen connectivity, and it highlights support to the ‘go global’ drive by mainland companies.”
This was the first agreement signed since the annual forum began in Shanghai’s financial zone in 2008. The opening session, featuring speeches by the governor of the People’s Bank of China and the chairman of the China Securities Regulatory Commission, is considered an important platform for Beijing to unveil market liberalisations or signal policy directions.
Christopher Hui Ching-yu, Hong Kong’s secretary for Financial Services and the Treasury, was expected to participate in a closed-door meeting on Wednesday evening, during which details of operating guidelines would be discussed, according to two local officials familiar with the matter.
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