China's ongoing capital market opening-up, with the connect programs between the Chinese mainland and Hong Kong markets serving as one good example, will be further advanced to inject more vitality into the markets and facilitate the country's high quality economic growth, said officials and industry experts.

The China Securities Regulatory Commission, the country's top stock market watchdog, is advancing a new round of deepened and comprehensive reform and opening-up of the Chinese capital market at a faster pace, CSRC Chairman Wu Qing said on Monday.

Wu made the comments during a forum which was held in Hong Kong on Monday to celebrate the 10th anniversary of the connectivity programs.

More pragmatic measures will be introduced to further open up the market and facilitate cross-border investment and financing, he added.

By firmly adhering to market-based and internationally accepted practices, as well as the rule of law, the CSRC will create a better environment for international investors to further tap into the Chinese market, Wu said.

During the same forum on Monday, CSRC Vice-Chairman Li Ming said that efforts will be made to further optimize and complete the connectivity programs between the Chinese mainland and Hong Kong markets. The investable targets included in the stock connect mechanism linking the Shanghai, Shenzhen and Hong Kong bourses will be expanded, Li said.

Amid the steady increase in trading value, the connect programs have effectively improved market liquidity and buoyed trading volume. The markets' appeal has also risen significantly. The connect programs have helped the A-share market to be included into well-established international indexes such as the MSCI, attracting more overseas long-term capital to increase their exposure to A shares, said Li.

The People's Bank of China, the country's central bank, said foreign institutions and individuals held 3.13 trillion yuan ($430 billion) of Chinese onshore stocks as of the end of September. It was the first time for this indicator to exceed the 3-trillion-yuan level since October 2023.

Bonnie Y Chan, CEO of Hong Kong Exchanges and Clearing Ltd, said at the Monday forum that nearly 77 percent of participating foreign investors have held A shares via the stock connect mechanism.

The trading value of the southbound and northbound legs of the stock connect program reached HK$280 billion ($36 billion) and 510 billion yuan, respectively, in October, both hitting record highs. This has proven the reliability of the stock connect mechanism, said Chan.

Meanwhile, the connectivity mechanism has increased the Hong Kong market's attraction as a listing venue for quality Chinese mainland companies and foreign enterprises. More capital, institutions, talent and information have been further accumulated in Hong Kong, said Li.

As of Sunday, a total of 40 Chinese mainland companies had gone public on the Hong Kong bourse so far this year, outnumbering the 34 such IPOs recorded during the same period in 2023, according to market tracker Wind Info.

The CSRC will support the launch of more cross-border exchange traded fund products and help expand the connect programs for depositary receipts. The mutual recognition of funds between the Chinese mainland and Hong Kong markets should be optimized, said Li.

Meanwhile, the CSRC will support more foreign institutions to make industry-related investments in China. Qualified domestic institutions will also be encouraged to make more outbound investments and conduct cross-border business, he said.

The coordination mechanism for the supervision of overseas listing should be further completed to support technological innovation and the development of new quality productive forces. Meanwhile, overseas listing channels for Chinese mainland companies should be further explored. Further opening-up in the futures market should be advanced, Li added.

As China advances its opening-up progress in an orderly fashion, the connectivity mechanism should further expand in terms of included product categories, participants, derivatives trading and green finance, said Tan Yueheng, chairman of BOCOM International Holdings Co Ltd.

 - China Daily