China Securities Regulatory Commission to Announce Statement on the 19th
Chinese authorities have decided to encourage Chinese companies to list in Hong Kong as a support measure to strengthen Hong Kong's status as a global financial hub.
According to state-run Xinhua News Agency on the 20th, the China Securities Regulatory Commission (CSRC) announced in a statement the previous day that it will "support initial public offerings (IPOs) of major Chinese companies in Hong Kong and relax regulations on stock trading links between Hong Kong and mainland exchanges."
Under this measure, the scope of eligible exchange-traded funds (ETFs) for trading through Shenzhen-Hong Kong Stock Connect (ShenGangTong) and Shanghai-Hong Kong Stock Connect (HuGangTong) will be expanded, and real estate investment trusts (REITs) have been included for the first time in cross-market trading.
The CSRC also stated that it will implement measures to enhance convenience for mainland Chinese investors, including supporting yuan-denominated stocks on the Hong Kong Stock Exchange.
Hong Kong, regarded as Asia's financial center, has recently suffered significant setbacks due to US-China tensions, the slowdown of the Chinese economy, and tightened controls through the implementation of the Hong Kong National Security Law. Trading volumes have sharply declined, and the IPO market has contracted significantly, leading to layoffs among global financial firms, including Wall Street investment banks.
Chinese authorities made it clear that this measure aims to strengthen Hong Kong's status as a global financial hub and to revitalize trading. The CSRC emphasized, "The central government will fully support Hong Kong in maintaining its special status and advantages in the long term," adding, "This measure will help strengthen Hong Kong's position as an international financial center and jointly promote the development of capital markets."
Immediately after the CSRC's announcement, the Hong Kong Securities and Futures Commission (SFC), the city's securities and regulatory authority, expressed its welcome in a separate statement. They said, "This measure will greatly contribute to the development of Hong Kong's financial market by increasing investment products in the Hong Kong financial market and expanding opportunities for domestic investors."
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