Member of the National Committee of the Chinese People's Political Consultative Conference Wang Dongsheng Proposes Suggestions at the Two Sessions: Focus on Financial Interconnection and Unification, and Introduces the "New Stock Connect" Concept

The upcoming National Two Sessions are approaching, and reviewing the “14th Five-Year Plan” outline is a key agenda item that attracts much attention. In the first year of the “14th Five-Year Plan,” Wang Dongsheng, member of the National Committee of the Chinese People’s Political Consultative Conference, Vice Chairman of the Agriculture and Rural Affairs Committee, and Chairman of HSBC Hong Kong and Shanghai Banking Corporation Limited, mainly focuses on further promoting deep connectivity within the Greater Bay Area, financial support for agricultural development, and other topics. He also offers suggestions on leveraging Hong Kong’s advantages to serve the overall national development.

Wang Dongsheng believes that mainland enterprises continue to actively list in Hong Kong, helping Hong Kong once again become the world’s largest IPO market. The connectivity between the two places is also continuously deepening. The relevant policies introduced last year allow Guangdong-Hong Kong-Macao Greater Bay Area companies listed in Hong Kong to also list on the Shenzhen Stock Exchange according to regulations, achieving mutual access for listing entities. If further allowing investors from Shenzhen and Hong Kong to participate in IPO trading in both places, enabling a more comprehensive “Stock Connect” in the Greater Bay Area, it will help deepen financial cooperation between Shenzhen and Hong Kong, enhance connectivity of financial markets in the Greater Bay Area, improve the inclusiveness and adaptability of the domestic capital market system, and promote the internationalization of the Renminbi.

Wang Dongsheng suggests that, from the perspective of investment targets, in the pilot phase, A+H listed companies can be included in the “New Stock Connect,” meaning mainland investors can purchase newly issued shares of A-share listed companies on the Hong Kong Stock Exchange, and Hong Kong and overseas investors can buy newly issued shares of Hong Kong-listed companies on the Shenzhen Stock Exchange. As the pilot matures, the scope of investment targets can be expanded to pre-IPO companies with a market value exceeding 5 billion RMB or HKD. This requirement aligns with the Shenzhen-Hong Kong Stock Connect, facilitating continued trading for investors after subscription.

Regarding qualified investors, the same mechanism as the Shenzhen-Hong Kong Stock Connect should be used. Hong Kong local and overseas investors participating in domestic IPOs must meet the qualification requirements of the Hong Kong Stock Exchange, while mainland investors participating in Hong Kong stock IPOs must satisfy the suitability management requirements of the Shenzhen Stock Exchange’s Stock Connect.

On capital arrangements and shareholding ratios, Wang Dongsheng believes that investor funds can be managed in a closed-loop manner. For applicable currencies, investors and listed entities on the Shenzhen Stock Exchange can use RMB, while investors and listed entities on the Hong Kong Stock Exchange can use HKD or offshore RMB. Since IPO issuance is not a daily trading activity, there is no need to set daily trading limits. Shareholding ratios can follow the requirements outlined in the “Provisions on the Interconnection Mechanism between the Mainland and Hong Kong Stock Markets.”

On the other hand, regarding improving financial support pathways for climate-adaptive agricultural projects, Wang Dongsheng believes that in practice, there is room for improvement in risk identification and funding continuity for such projects. He suggests enhancing data and financial risk modeling channels based on the existing “Meteorology+” policy, refining the agricultural climate adaptation indicator system within the current green finance standards, and establishing phased support and market-oriented continuation mechanisms based on risk improvement.