First, overseas funds enter the China stock market through Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect.
Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect, which are equivalent to "narrow definitions", entered the China stock market. Let's take Shanghai-Hong Kong Stock Connect as an example (except for some restrictions, the concepts of Shenzhen-Hong Kong Stock Connect and Shanghai-Hong Kong Stock Connect are basically the same). Shanghai-Hong Kong Stock Connect includes Shanghai Stock Connect and Hong Kong Stock Connect. As the name implies, Shanghai Stock Connect and Hong Kong Stock Connect are antagonistic within the framework of Shanghai-Hong Kong Stock Connect, that is, allowing Hong Kong capital to enter the Shanghai stock market and mainland capital to enter the Hong Kong stock market. It is not the Hong Kong Exchanges and Clearing Limited (HKEx) that matches the Shanghai Stock Connect, but the Stock Exchange of Hong Kong Limited (SEHK), a wholly-owned subsidiary of HKEx.
Interestingly, shortly after Hong Kong's return to China, in order to integrate Hong Kong's financial market, the original Stock Exchange of Hong Kong, Hong Kong Futures Exchange and Hong Kong Securities Clearing Company Limited were merged to form the Stock Exchange. It is a wholly-owned subsidiary of the Hong Kong Stock Exchange. More interestingly, HKEx, the parent company of the Stock Exchange, is listed on the Stock Exchange as a company.
Without further delay, Shanghai Stock Connect and Hong Kong Stock Connect in Shanghai-Hong Kong Stock Connect were opened in 10, 201/4:
1) Shanghai Stock Connect means that Hong Kong investors entrust Hong Kong brokers to report to the Shanghai Stock Exchange through the securities trading service company established by the stock exchange, and buy and sell stocks listed on the Shanghai Stock Exchange within the prescribed scope. At the beginning of its establishment, Shanghai Stock Connect included Shanghai Stock Connect 180 Index, Shanghai Stock Exchange 380 Index and A+H shares listed on the Shanghai Stock Exchange. Shares in Shanghai Stock Exchange are quoted and settled in RMB.
2) Hong Kong Stock Connect refers to a securities trading service company established by mainland investors through the Shanghai Stock Exchange, which entrusts mainland securities companies to declare the trading of stocks listed on the stock exchange within the prescribed scope. At the beginning of its establishment, the stock range of Hong Kong Stock Connect included three types, namely, the Hang Seng Composite Large-cap Index of the Stock Exchange, the constituent stocks of the Hang Seng Composite Medium-cap Index, and A+H shares listed on both the Stock Exchange and the Shanghai Stock Exchange. Shares in the Stock Exchange are quoted in Hong Kong dollars and settled in RMB.
Later, the Shanghai Stock Exchange and the stock exchange refined and expanded some qualifications, regulatory provisions, total indicators and so on.
Second, qualified foreign institutional investors (QFII)
As far as Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect are concerned, their capital entering the mainland is not the earliest or even the main force. In fact, as early as 2002, China Qualified Foreign Institutional Investor (QFII)
, QFII) system was officially introduced, which is the first time that China allowed qualified foreign institutional investors to invest in China A-share market after approval. According to the data released by the State Administration of Foreign Exchange (SAFE), by 20 19, QFII's investment should easily exceed 1000 billion US dollars.
Consistent with the principle that Shanghai Stock Connect and Hong Kong Stock Connect in Shanghai-Hong Kong Stock Connect are equivalent opposites, QFII (Qualified Foreign Institutional Investor) also has its equivalent opposites, namely QDII (qualified domestic institutional investor), and its keyword "institution" is very important and plays the role of an authentication channel. In fact, QFII and QDII are not unique systems in China. QFII and QDII have different names as long as foreign capital is allowed to participate in all global markets or local capital is allowed to go to sea. The most typical example is South Korea.
Under the QFII system, anyone who intends to invest in China's domestic capital market must buy and sell securities through certified institutions, so as to facilitate the China government and market supervision departments to conduct foreign exchange supervision and prevent unexpected exchange rate fluctuations; 2) Macro-control aims to reduce the impact of hot money flow on the securities market.