Stock Connect ten years on
Foreign investors and capital market liberalization are growing keywords in the finance journals, with 13 papers in July–September 2026 against about 7 per quarter before. More than ten years after Shanghai-Hong Kong Stock Connect opened, has foreign ownership changed how Chinese stocks are priced, and what happened when foreign money left?
What prompted this#
Since October 2025, 36 papers carry a Stock Connect, capital-market-liberalization, capital-account-liberalization, financial-opening or foreign-investor keyword (26 in finance journals). "Foreign investors" appears on 17, "capital account liberalization" on 8, "capital market liberalization" on 7 and the two Stock Connect programmes on 7. The quarter to September 2026 had 13 such papers against about 7 per quarter earlier.
Questions#
- Are stocks eligible for Stock Connect priced more in line with their fundamentals, with less of the retail-driven noise found in A-shares?
- When foreign investors sold heavily in 2022–2024, did eligible stocks fall more than ineligible ones, and did domestic institutions step in?
- Did eligibility change firms' disclosure, dividends or governance?
Data that could help#
Daily northbound and southbound flows, eligibility lists and their changes, A-share and H-share prices, and firm data (CSMAR).
Next step#
Compare the return and volatility behaviour of stocks added to and removed from the eligible list around each list revision.