China B shares are also known as Special Renminbi-Denominated Shares, which are shares issued by companies registered in China and listed in Chinese local B market. There are two Chinese local B markets: the Shanghai B shares market and the Shenzhen B shares market. The B shares listed on the shanghai Stock Exchange are settled in US dollars, while the B shares listed on the Shenzhen Stock Exchange are settled in Hong Kong dollars. Starting from June 1, 2001, all legally-owned foreign currency deposits can be used to trade China B shares. Although the local mainland Chinese are allowed to trade China B shares using the legitimate foreign currency deposits, the trading participants of B Shares are still primarily foreign investors.
Stock market in the United States of America (U.S.) is the largest stock market in the world with the greatest market capitalization of listed companies and the highest trading volume, comprising several exchanges among which there are a total of as many as 5,000 companies listed on NYSE Euronext and Nasdaq Stock Market. According to the data from World Federation of Exchanges, in December 2011 the total market capitalization of New York Stock Exchange and Nasdaq exceeded US$14 trillion. All companies listed in the U.S. are required to publish quarterly results, and to disclose important information in compliance with regulatory requirements under strict market supervision. All these make the U.S. stock market ideal to invest in.
Shanghai-Hong Kong Stock Connect is a securities trading and clearing links programme to be developed by Hong Kong Exchanges and Clearing Limited (HKEx), Shanghai Stock Exchange (SSE) and China Securities Depository and Clearing Corporation Limited (ChinaClear), aiming to achieve a breakthrough in mutual market access between the Mainland and Hong Kong.
Capitalizing on the rapid development of Chinese economy, Hong Kong has become an important international financial center and is widely regarded as one of the fastest growing export-oriented economy in the Asia-Pacific region. In recent years, Hong Kong has successfully attracted enterprises from all over the world to list their companies here, especially Chinese enterprises. The market weighting of state-owned and privately-owned enterprises has increased gradually in the equity market, which suggests a growing impact of mainland Chinese economy on the development of Hong Kong stock market.