Mainland And Hong Kong Stock Market Integration

Inview of the in complete opening-up, the value of the stockmarket in Chinese Mainland is higher than the international ones; and there is different price of the same share between the stock market in Mainland and others, especially in Hong Kong. In reaction to the phenomenon, with consideration of the present conditions of the stockmarkets in Mainland and Hong Kong, this paper aims to search a method to blend A Stock with H Stock, making a more open and healthy stockmarket in Mainland and avoiding bubbles caused by over-estimated value of A Stock, through improving hedge operation, release and supervision of information ,trading mechanism, on the premise that national exchange control and interest regulation become less strict and more market-oriented.This paper also indicate the potential risk during the blending of A Stock and H stock, and accordingly, the risk prevention and financial regulation.Blending A Stock with H Stock can solve excess liquidity and the problem that RMB became funds out standing for foreign exchange, which attribute to too much surplus of our country's balance of payments. This method also makes our country link up with the globe system quickly and acquires status in international capital market.According to the development of economy and stockmarket Mainland and Hong Kong, the author thinks that RMB and $HK are exchanged each other without limited. Furthmore, A Stockmarket and H Stockmarket will be identical with trading mechanism, release and supervision of information, financial derivatives, new stock issuing mechanism and regulatory mechanism. Then the competence of stockmarket will be improve in the world.