An Empirical Study On The Impact Of Shanghai&Shenzhen-Hong Kong Stock Connect Program On The Correlation Between Onshore And Offshore RMB Interest Rate

Whether the financial liberalization measures effectively strengthened the communication between after the program of Shanghai&Shenzhen-Hong Kong Stock Connect are explored with Co-integration test and Granger causality test.using the term of Hong Kong interbank offered rate(CNH-HIBOR)and Shanghai interbank offered rate(SHIBOR).The research results show that there is no obvious narrowing trend in offshore and onshore RMB spreads after the connect program.There is no long-term stable equilibrium relationship between most of SHIBOR and CNH-HIBOR and the one-way or two-way granger causality doesn't exist.This paper argues that this financial opening policy didn't deepen the interconnection and interaction of offshore and onshore market mainly because of the policy itself design flaws,low ratio of the volume of total market share and the marketization level difference of two market.Further expanding the "flow" of convenient cross-border investment channels such as Shanghai-Hong Kong Stock Connect program,Shenzhen-Hong Kong Stock Connect program,QDII and QFII,perfecting supporting open environment at the same time and deepening the reform of the economic and financial system on the mainland that can better promote the interaction and links between onshore and offshore market and maintain both financial markets stability.In this way,we can create more favorable conditions for the internationalization of RMB and effectively serve this national financial strategy.This paper argues that this financial opening policy effectively connects the cross-strait capital market,the two-way capital flow deepening is conducive to promoting the capital factor price market,enrich the offshore RMB products and business,improve the RMB exchange rate mechanism,is to force the mainland capital market and economic and financial system reformation,the promotion of capital account liberalization,interest rate marketization and an important step in the internationalization of the renminbi.But also better promote Hong Kong offshore market interaction and for the stability of the two financial markets to create more favorable conditions.