Opening the Trade Valve.docVIP

Opening the Trade Valve 　　Two years after the launch of the Shanghai-Hong Kong Stock Connect program， China introduced another stock trading link between the Chinese mainland and Hong Kong. This move serves to further push forward the yuan’s internationalization and cements Hong Kong’s status as an offshore yuan hub. 　　“Only by opening wider to the outside world and constantly advancing the marketization， legalization and internationalization of China’s capital market can the real economy be better served， making the capital market more competitive，” said Liu Shiyu， Chairman of China Securities Regulatory Commission（CSRC）， in his speech at the launch ceremony of the Shenzhen-Hong Kong Stock Connect program on December 5. 　　His view echoed that of Wu Lijun， Chairman of Shenzhen Stock Exchange， who believes that with the Shenzhen-HK program in place， the Chinese mainland and Hong Kong will cooperate with each other on a larger scale and at a higher level， which will elevate the international competitiveness of the two markets and increase their capability to serve the real economy. 　　As statistics have shown， within the first week of the launch， blue chip companies listed on the Shenzhen Stock Exchange attracted the most northbound orders， such as Midea Group， Gree Electric Appliances Inc.， Wuliangye and Vanke. On the other hand， southbound orders took a fancy to small and medium-sized hi-tech stocks such as BYD， ChinaSoft International and Fullshare Holdings Ltd. 　　“There is definitely interest among foreign investors in Chinese mainland shares， but valuation levels among those companies’Shenzhen shares may cause them to be more selective. We are seeing interest in high quality companies which are attractively valued，” Sandy Mehta， CEO of Hong Kong-based Value Investment Principals Ltd.， told Beijing Review. 　　 Lukewarm reactions 　　China launched the Shanghai-HK Stock Connect program in November 2014 to link the two cities’ stock markets under an aggregate