China is boosting stock market ties with Hong Kong with new measures allowing cross-border stock investment between Hong Kong and Shanghai.
China’s regulator said it would allow mainland investors to trade shares in designated HK-listed firms.
At the same time, Hong Kong investors will be allowed to buy shares in companies listed in Shanghai.
The chairman of the Hong Kong exchange called it a “breakthrough” for the opening up of China’s capital markets.
The pilot project will launch after a preparation period of about six months.
During the trial period, Hong Kong investment in Chinese stocks will be limited to a daily quota of 13bn yuan ($2bn; £1.2bn).
Mainland investment in Hong Kong stocks will be limited to a daily quota of 10.5bn yuan.
The pilot scheme will also limit trading to companies already dual-listed in Shanghai and Hong Kong, as well as other selected blue chip companies.
The tie-up was announced hours after China’s Premier Li Keqiang said China would “actively create conditions to establish a transaction interconnection mechanism for the Shanghai and Hong Kong stock exchanges, to push forward the two-way opening of capital markets in mainland China and Hong Kong.”
The premier made the comments at the Boao Forum for Asia in China’s southern island Hainan.