Hong Kong, Shanghai to tighten financial ties at Lujiazui Forum

Hong Kong and Shanghai will sign a deal to increase collaboration in the financial sphere at the Lujiazui Forum on Wednesday, as the cities strengthen links to better withstand the implications of geopolitical tensions.

Financial Secretary Paul Chan Mo-po will be present for the signing of an action plan for collaborative development between the two cities on the opening day of the two-day forum in Shanghai, according to a statement from the Hong Kong government, which did not provide more details.

The agreement would map out a blueprint for cooperation in “multiple layers and fields”, according to people familiar with the matter. Speculation is buzzing that the two cities will expand the “connect” schemes that allow cross-border trading and start trials of financial derivative products involving foreign currencies and commodities.

Details would emerge after discussions in a closed-door meeting on Thursday that would be attended by Christopher Hui Ching-yu, secretary for Financial Services and the Treasury, according to a separate source who was briefed on the matter.

The agreement, called the Action Plan for Collaborative Development of Shanghai and Hong Kong International Financial Centres, would mark the most significant cooperation between the cities since the launch of the Stock Connect scheme in 2014, which has evolved into the most popular conduit for foreign investors in China’s US$10.5 trillion yuan-denominated stock market.

Closer integration between the two metropolises would put China in a better position to cope with the risk of a financial decoupling from the US, where a cohort of Chinese companies trading on the New York Stock Exchange and the Nasdaq face possible delisting.

South China Morning Post