Shanghai and Hong Kong, the two cities striving to be China's financial center, are setting aside their competitive differences to discuss more interaction and how they can complement each other.

In a recent meeting with Henry Tang Ying-yen, Financial Secretary of the Hong Kong Special Administrative Region (SAR) Government, Han Zheng, Mayor of Shanghai, said that interaction and mutual support in the financial sector are keys to future cooperation between Shanghai and Hong Kong. Meanwhile, Tang put forward detailed suggestions that stock exchanges in the two cities establish cooperation mechanisms to realize interaction between the A share market in the mainland and the H share market in Hong Kong, with the aim of facilitating more companies to be listed simultaneously in the two markets.

Stock market cooperation

Last October, the Industrial and Commercial Bank of China (ICBC) issued stocks simultaneously in Shanghai and Hong Kong, raising nearly $22 billion and accomplishing the largest initial public offering in the world.

"I believe that interactive development of the two financial markets will be a new trend, which is mutually beneficial and a double win," Henry Tang said at the Seminar on Hong Kong's Financial Services held in Shanghai on February 2.

Alexa Lam, member of the board of Hong Kong Securities and Futures Commission and Executive Director with responsibility for the Intermediaries and Investment Products Division, also said that in 2006, the total market value of the Hong Kong stock exchange ranked sixth in the world while that of the Shanghai stock exchange ranked 11th. Together with the Shenzhen stock exchange, the market will be tremendous. The financial markets of Hong Kong and the Chinese mainland should strengthen cooperation.

According to Lam, regulatory bodies of Hong Kong and the Chinese mainland have been consulting one another on interaction between the A share market and H share market in order to promote simultaneous listing. In the future, cooperation will be strengthened in this aspect.