Hong Kong Stock Exchange: As of September, the total amount of securities assets held by overseas investors in mainland China reached nearly 7.6 trillion yuan.

On November 11, as the Hong Kong Stock Exchange (HKEX) approaches the tenth anniversary of the mutual market access mechanism, HKEX released the "Mainland and Hong Kong Capital Market Mutual Market Access Ten-Year White Paper", comprehensively reviewing the development of the mutual market access mechanism over the past ten years, analyzing the factors that have led to its success, and looking forward to the future development of mutual market access. The white paper points out that the launch and continuous optimization of the Shanghai-Hong Kong Stock Connect and Bond Connect have significantly increased the international attractiveness of the Chinese capital market, promoting the inclusion of A-shares and Chinese government bonds in mainstream global indexes, attracting more foreign investors. At the same time, the inclusion in indexes has attracted more foreign investors to allocate more assets to Chinese assets. As of September 2024, the total value of Chinese mainland securities assets (including stocks and bonds) held by foreign investors is nearly 7.6 trillion RMB, an increase of over 4.7 trillion RMB compared to when MSCI first included A-shares in June 2018. On November 17, 2014, the Shanghai-Hong Kong Stock Connect was officially launched, allowing investors to trade stocks listed on the markets of both places through the connection of local financial infrastructure, creating a new open model for capital markets. On December 5, 2016, the Shenzhen-Hong Kong Stock Connect was opened, expanding the mutual market access between the Hong Kong and Mainland capital markets from Shanghai to Shenzhen. Over the past decade, with the joint efforts of regulatory authorities and financial institutions on both sides, mutual market access mechanisms such as the Shanghai-Hong Kong Stock Connect, Bond Connect, and Cross-border Market Maker Swap have continued to expand and upgrade, laying a solid foundation for the coordinated development of the two markets. Highlights of the Past Ten Years Over the past decade, mutual market access has achieved significant results in terms of product coverage, trading and settlement mechanisms, and investor participation, providing more efficient cross-border asset allocation channels for domestic and foreign investors, injecting new liquidity and vitality into the two capital markets, playing an important role in enhancing the investability and internationalization of the Chinese capital market, strengthening the resilience of the two markets, and reinforcing Hong Kong's position as an offshore RMB hub. The scope of investment targets steadily expanded, and products became increasingly diverse. As of the end of September 2024, there are over 3,300 eligible stocks under the Shanghai-Hong Kong Stock Connect, covering over 90% of the total market capitalization of listed companies in Shanghai, Shenzhen, and Hong Kong, with over 80% of trading volume. With the inclusion of Hong Kong-listed companies with different voting rights structures, biotechnology companies, foreign companies, and companies listed on the Shanghai Stock Exchange's Sci-Tech Innovation Board, eligible stocks under the Shanghai-Hong Kong Stock Connect have become more diversified, providing convenience for domestic and foreign investors to flexibly allocate assets and enjoy the benefits of both markets. The trading and settlement mechanism continued to be optimized, and trading activity increased. Over the past decade, the trading and settlement mechanism of the Shanghai-Hong Kong Stock Connect has undergone a series of optimizations, including expanding trading quotas and optimizing trading calendars. In addition, the Hong Kong market has also introduced services such as the Special Segregated Nominee Account, the Synapse settlement acceleration platform, and normal trading arrangements in adverse weather conditions. These optimization measures have provided convenience for domestic and foreign investors in trading and position management, and further improved the operational efficiency of the Shanghai-Hong Kong Stock Connect. With the optimization of the trading and settlement mechanism, trading activity under the Shanghai-Hong Kong Stock Connect has steadily increased. In the first three quarters of 2024, the average daily trading volume of northbound and southbound trades was 123.3 billion RMB and 38.3 billion Hong Kong dollars, respectively, representing a 21-fold and 40-fold increase from the first month of operation in 2014, accounting for 6.7% of the total trading volume in the mainland market and 16.9% in the Hong Kong market. Increased participation of domestic and foreign investors, steady growth of asset size. With the steady development of the Shanghai-Hong Kong Stock Connect, an increasing number of mainland investors are engaging in cross-border investment through the Stock Connect. As of September 2024, the total market value of securities assets held by mainland investors via the Stock Connect exceeded 3.3 trillion Hong Kong dollars, over 200 times higher than at the end of 2014. The establishment and continuous optimization of the Shanghai-Hong Kong Stock Connect and Bond Connect have significantly increased the international attractiveness of the Chinese capital market, promoting the inclusion of A-shares and Chinese government bonds in mainstream global indexes, attracting more foreign investors. At the same time, index inclusion has also attracted more foreign investors to increase their allocation of Chinese assets. As of September 2024, the total value of Chinese mainland securities assets (including stocks and bonds) held by foreign investors is nearly 7.6 trillion RMB, an increase of over 4.7 trillion RMB compared to when MSCI first included A-shares in June 2018. Among them, the total market value of A-shares held by northbound funds under the Shanghai-Hong Kong Stock Connect is about 2.4 trillion RMB, accounting for 77% of the total market value of domestic stocks held by foreign investors; foreign investors hold a total of over 4.4 trillion RMB in Chinese bonds, an increase of approximately 144% from before the first inclusion in mainstream bond indexes. Promoting standardized operations of listed companies, facilitating the cross-border business development of securities operating institutions in both places. The Shanghai-Hong Kong Stock Connect has brought a broader investor base to the mainland and Hong Kong markets, with many A-share companies entering major international indexes due to the Stock Connect, promoting corporate governance and long-term development. Additionally, the business of securities companies and asset management institutions has been promoted through the Shanghai-Hong Kong Stock Connect, with brokerage services expanding to Shanghai, Shenzhen, and Hong Kong markets. Strengthening Hong Kong's role as an offshore RMB hub. As another important milestone of mutual market access, the launch of Bond Connect has connected international investors with China's rapidly growing fixed-income securities market, promoting the orderly opening of the Chinese bond market and driving the development of the offshore RMB market ecosystem in Hong Kong. In just a few years, the average daily trading volume of the "northbound link" of the Bond Connect has increased from 15 billion RMB in the first month to 439 billion RMB in the first nine months of 2024; over half of transactions by international investors investing in the mainland bond market are conducted through the Bond Connect, making the "northbound link" of the Bond Connect the main channel for international capital investment in Chinese bonds. In addition, the Cross-border Market Maker Swap, as an innovative initiative connecting the onshore and Hong Kong over-the-counter derivatives markets, synergizes with the Bond Connect to provide foreign investors with efficient and convenient risk management tools for RMB assets. As of the end of September 2024, the Cross-border Market Maker Swap has attracted 65 foreign institutions to join the market, with the daily average trading nominal principal increasing from approximately 30 billion RMB in the first month to nearly 180 billion RMB.The trading volume has achieved a several-fold increase.Future prospects As the key infrastructure operator of the Hong Kong financial market, HKEX will continue to work hand in hand with mainland partners and market participants under the leadership of regulatory authorities in both locations. This includes further enriching product categories, expanding the scope of targets; continuously optimizing the Shanghai-Hong Kong Stock Connect trading mechanism and supporting services; exploring more measures to enhance investor participation and convenience; and constantly improving arrangements such as Bond Connect and Stock Connect.