HONG KONG, Aug. 22 (Xinhua) -- Hong Kong saw its first listing of H-shares 30 years ago, the beginning of a journey marked by Chinese mainland companies venturing into the international capital market.
With over 1,400 mainland Chinese companies listed, Hong Kong's competitiveness as an international financial center has continued to strengthen.
"The prosperity of H-share listings is an exemplary win-win achievement between Hong Kong and the mainland, representing the best case of 'what the nation needs is what Hong Kong excels in,'" said Laura Cha Shih May-lung, chairperson of the Hong Kong Exchanges and Clearing Limited (HKEX).
On July 15, 1993, Tsingtao Brewery became the first mainland company to issue H-shares and list in Hong Kong, inaugurating an era of large-scale listings by mainland companies in the city.
"The H-share listing 30 years ago was the first step for Hong Kong's financial market to connect the mainland with the world," said Cha. "This step laid the foundation for the continuous upgrading of Hong Kong's financial market and the interconnectedness between Hong Kong and the mainland."
Currently, mainland companies have become the main force in the Hong Kong stock market. According to HKEX statistics, in 1993, there were only 40 mainland firms listed in Hong Kong, with a market capitalization of 146 billion Hong Kong dollars (about 18.63 billion U.S. dollars), accounting for less than 5 percent of the total. Today, the market capitalization stands at around 28 trillion Hong Kong dollars, accounting for a remarkable 77 percent.
The achievements of mainland companies listing in Hong Kong are not only attributable to the unique advantages of Hong Kong's internationalization under the "one country, two systems" but also the enormous business opportunities brought about by China's economic takeoff, Cha said.
Since the birth of the first H-share, mainland companies' listing in Hong Kong has profoundly transformed the city's stock market. Over the past 30 years, mainland companies have raised approximately 8.3 trillion Hong Kong dollars through stock issuance in Hong Kong, accounting for about 70 percent of the total funds raised in the Hong Kong stock market.
"Without the fundraising by state-owned enterprises in Hong Kong 30 years ago, the Hong Kong capital market would not have achieved its current status on the international stage," said Cha.
H-share listings significantly enriched the market structure in Hong Kong, enhanced its attractiveness to international institutions, and enabled Hong Kong to evolve from a regional stock market to a leading global international financial center.
As China has entered a phase of high-quality development, which requires the capital market to better serve as a hub for promoting technological innovation and the transformation and upgrading of the real economy. This necessitates Hong Kong to continue playing its role as an international financial center, which will bring more development opportunities to Hong Kong.
Cha said she believes that with the rapid growth of China's pharmaceutical market and reforms in the approval system for innovative drugs, the mainland has seen the emergence of numerous outstanding biotech companies, and Hong Kong is poised to become the preferred listing destination for these companies.
"Hong Kong is undoubtedly capable of developing into a renowned biotech investment and financing center," she said.
With the establishment of mutual market access schemes such as the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect, Bond Connect, and Cross-Boundary Wealth Management Connect, Hong Kong and the mainland have further enhanced the interconnection of their interest rate markets, expanded the range of renminbi-denominated products, and improved risk management tools.
"In the future, the HKEX will continue to play a crucial role in connecting China with the world," said Cha. "It will not only continue to attract international capital 'inward' but also assist mainland Chinese investors in 'going outward,' promoting the further two-way opening of the Chinese capital market." (1 U.S. dollar equals 7.84 Hong Kong dollars)
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