http://www.marketwatch.com/story/who-gains-most-from-hong-kong-shanghai-through-train-2014-11-09
The China Securities Regulatory Commission’s decision to permit stock market access between the mainland and Hong Kong is likely to have a far-reaching impact on Shanghai and Hong Kong. Under the proposed plan, investors from the Chinese mainland and Hong Kong can freely invest in stocks listed in the reciprocal cities.
I consider the decision as a progress in china’s economy, which goes from “closed” to “open”. Here the open means the financial market. After the Chinese reform, China’s economy overall is becoming global through foreign investments and cooperation between countries, and what is more, the flow of production factors further improve the globalization. However, the financial market remains “closed”. The stock connect is remarkable because financial market begins to open up.
In addition, the stock connect, in my opinion, increases the internationalization of RMB. The RMB will not only flow around the world’s financial market, but it will be potential to become Reserve Currency in the future.
The Stock Connect will further have a great impact on the flow and balance of world’s capital and China’s A-share market will become active after years of depression.