Research Report Of The Operation And Effect Of Shanghai-Hong Kong Stock Connect

Shanghai-Hong Kong Stock Connect is the latest reform of China’s securities market development, it refers to Hong Kong and Shanghai stock exchange interconnection mechanism, which includes Shang Hai Tong and Hong Kong Tong. Hong Kong investors can trade on the Shanghai stock by entrusting brokers, established by the Stock Exchange securities trading services company within a predetermined range; Mainland investors can entrust Mainland securities companies, set up by the Shanghai Stock Exchange securities trading services company trading on the Stock Exchange listed stocks within a predetermined range. November 17, 2014, Shanghai-Hong Kong Stock Connect formal synchronously opened in Shanghai and Hong Kong, the new cross-border capital flow channels received hot pursuit on the market just as launched, it has become the focus of academic discussion of the role and effectiveness of Shanghai-Hong Kong Stock Connect.This paper analyzes the operation and impact on China’s economy after the starting of Shanghai-Hong Kong Stock Connect by method of literature review, data mining and interviews with stock employees. The innovation of this paper lies in selecting the hot topic of Shanghai-Hong Kong Stock Connect, expanding for its operation, analyzing through the impact on the cross-border capital flows, Chinese stock market and RMB’s internationalization while using the latest data. After in-depth research and analysis, shows that Shanghai-Hong Kong Stock Connect runs stable, basically as expected, and its impact on China’s economy is positive, but some limitations. For the deficiencies of the Shanghai-Hong Kong Stock Connect, this paper also proposes the policy advices of to expand the amount and investment targets of Shanghai-Hong Kong Stock Connect, to reduce the transaction costs associated with the investment threshold, to improve the trading mechanism and legal system and so on.