Shanghai-HK stock link to lure intl investors to China market   

(ECNS) – The landmark Shanghai-Hong Kong Stock Connect program is a significant step in the globalization of the Chinese mainland's capital market, a leading researcher has said.

The program, launched on Monday, opens a door for Hong Kong and overseas investors to buy shares in Shanghai-listed companies, while mainland buyers can access Hong Kong stocks.

Zhu Mingfang, associate researcher at the Development Research Center of the State Council, said the program will push more international investment institutions to consider putting money into the mainland's capital market.

He said the connection can help change the mismatch between China's GDP and its Class-A shares in global allocation.

The market value of China's A-shares accounted for 10.5 percent of the world's stocks, but made up zero of MSCI's China Index and Emerging Market Index. Zhu said that's because China's share market is relatively closed, while the country's share in global GDP reached 12.3 percent.

If the program goes well, a Shenzhen-Hong Kong Stock Connect is expected to come out in the near future, Zhu added.

Chinese shares closed lower on Monday after the official launch of the program. On Tuesday, China stocks continued to drop. Insiders said the decline was expected.