China approves Shenzhen Stock Connect

The Shenzhen trading link will operate alongside the current Shanghai Stock Connect.

The Chinese government has formally approved the Shenzhen-Hong Kong Stock Connect trading link in a bid to create a better regulated trading environment.

The approval comes almost two years after the launch of the Shanghai-Hong Kong Stock Connect in November 2014 which the eventual Shenzhen platform will be based on.

Launching Shenzhen alongside the existing Shanghai-Hong Kong venture is aimed at building a more extensive capital market and capitalising on the geographical advantages of Shenzhen.

It is also hoped that the venture will allow investors to experience increased economic benefits from both mainland China and Hong Kong, increase cooperation between the two and consolidate Hong Kong’s position in the financial industry.

“China’s decision to launch Shenzhen-Hong Kong Stock Connect demonstrates the country’s continuing commitment to liberalising its financial sector and opening up its capital markets to global investors,” said Helen Wong, chief executive Greater China, HSBC.

“This link should provide investors around the world with a convenient way to access China's new generation of private sector companies listed in Shenzhen, including an array of innovative internet and technology players based in the Pearl River Delta.”