Core Viewpoint - The collaboration between Shanghai and Hong Kong aims to establish a global financial center that can compete with New York and London, enhancing China's financial security and international influence [1][3]. Summary by Sections Strategic Significance of Shanghai-Hong Kong Collaboration - The collaboration is essential for building a strong international financial center, as neither Hong Kong nor Shanghai can independently challenge the dominance of New York and London [3]. - According to the GFCI38 report, Hong Kong ranks third and Shanghai eighth globally, but both lag significantly behind New York and London in key financial metrics [3]. - As of June 2024, the market capitalization of listed companies in New York is $69.48 trillion, compared to $3.87 trillion in Hong Kong and $6.3 trillion in Shanghai [3]. Importance of Renminbi Internationalization - A robust currency is crucial for becoming a financial powerhouse, and advancing the internationalization of the Renminbi is a key component of this strategy [4]. - By the end of 2024, the Renminbi is projected to be the fourth largest payment currency globally, but its international status does not match China's economic strength [4]. - The Renminbi's "currency international payment coverage rate" is only 0.25, significantly lower than the dollar (1.82), euro (1.51), pound (2.17), and yen (0.97) [4]. Progress in Financial Connectivity - The "Shanghai-Hong Kong Stock Connect" has seen significant upgrades, enhancing capital market connectivity [6]. - By May 2025, net inflows through the Hong Kong Stock Connect exceeded 4.35 trillion HKD, with southbound trading accounting for 22.5% of Hong Kong's market turnover [6]. - The launch of the "Cross-Border Payment Link" in June 2025 has streamlined cross-border payments between Hong Kong and mainland China [7]. Action Plan for Collaborative Development - The "Shanghai-Hong Kong International Financial Center Collaborative Development Action Plan" focuses on four key areas: deepening connectivity, enhancing cross-border financial services, promoting standardization and innovation, and optimizing institutional collaboration [8]. - The collaboration aims to elevate China's voice and influence in the global financial system [8]. Future Opportunities and Challenges - The collaboration faces both opportunities from national strategies and challenges from infrastructure connectivity and regulatory differences [10]. - The experience of London and New York provides valuable insights for Shanghai and Hong Kong's financial collaboration, emphasizing the importance of complementing each other's strengths [10]. Proposed Directions for Advancement - Six key areas for advancement include enhancing financial infrastructure connectivity, promoting offshore and onshore financial integration, developing cross-border finance, advancing green finance, fostering fintech collaboration, and establishing a robust support mechanism [11][12].

Core Insights - The online seminar "Shanghai-Hong Kong Cooperation: Reshaping the New Pattern of International Financial Center Development" highlighted the recovery of Hong Kong's financial market post-2024, driven by capital inflows, low interbank rates, and leading global IPO financing [3][5] - The collaboration between Shanghai and Hong Kong is characterized as structurally complementary rather than competitive, with both cities serving distinct roles in the financial ecosystem [9][10] Group 1: Hong Kong Financial Market Recovery - Hong Kong's financial market shows signs of recovery with significant capital inflows, a drop in interbank rates, and a substantial increase in IPO financing, reaching HKD 280.8 billion in the first half of 2025, a 322% increase year-on-year [5][6] - The total market capitalization of Hong Kong's stock market reached HKD 42.7 trillion by the end of June 2025, up 33% from the previous year [5] - Despite positive signals in the financial market, the real estate sector remains weak, indicating a cautious outlook on the overall economic recovery [6] Group 2: Structural Factors Supporting Hong Kong's Financial Center Status - Hong Kong's stability as an international financial center is supported by a robust legal system, ongoing demand for offshore financial services from mainland enterprises, and its role as a trade hub in the Asia-Pacific region [7][8] - The relationship between Hong Kong and the U.S. remains strong, with a trade surplus of USD 271.5 billion over the past decade, highlighting Hong Kong's importance as a business base for U.S. companies [8] Group 3: Opportunities for Shanghai-Hong Kong Cooperation - Future cooperation between Shanghai and Hong Kong is expected to focus on five key areas: enhancing connectivity mechanisms, collaboration in the bond market, green finance, digital currency and fintech, and supporting cross-border trade and financial services [11][13][14][15] - The development of a "New York-London" style dual hub structure is proposed, with Shanghai focusing on onshore financial services and Hong Kong on offshore services [29] Group 4: Challenges in Renminbi Internationalization - The international payment status of the Renminbi is currently misaligned with China's economic standing, with a coverage rate of only 0.25, compared to higher rates for other major currencies [23] - The offshore financial development in China is lagging behind the growth of its foreign trade, indicating a need for enhanced support for the offshore Renminbi market [24] Group 5: Implementation Pathways for Offshore Financial Development - The collaboration between Shanghai and Hong Kong is essential to address structural challenges in offshore financial development, focusing on upgrading free trade account functions, restarting offshore bond markets, and enhancing digital currency applications [28][32] - The proposed action plan emphasizes the importance of offshore financial services and the need for regulatory frameworks to support innovation and market demand [27][32]