The Story of Stock Connect & China Equity Investing

Stock Connect began in November 2014, what does it mean for China A-share investing and onshore and offshore China stock exchanges?

15 Oct 2019 2 min read

Stock Connect has changed China equity investing for the better.
It started on November 17^th, 2014 with the Hong Kong Shanghai Stock Connect.
Stock Connect linked international investors with the Shanghai Stock Exchange via Hong Kong as well as allowing Shanghai investors to allocate to stocks on the Hong Kong Stock Exchange.
Stock Connect was extended to link the Hong Kong Stock Exchange and Shenzhen Stock Exchange on December 5th 2016.
To date, the program has brought more than USD 110bn of overseas capital into China's A-share markets, according to Bloomberg data.
Also, the improved access from Stock Connect was a key reason why China A-shares were included in the MSCI equity benchmarks from June 2018.
Many years ago, China stocks were divided between onshore stocks, i.e. listed in mainland China, and offshore stocks, i.e. listed in Hong Kong or US markets.
Now, we believe the success of Stock Connect means the distinction between onshore and offshore China equities has disappeared.
Instead, we believe that investors should look at China equities from an All China perspective, i.e. investing according to wherever the best opportunities are, not because of where they are located.
And we believe that's why Stock Connect has changed China equity investing for the better.