"However, since the A share market and H share market are two different markets and investors have different evaluations of stock value in the two markets, it is natural there is price gap of the same stock in the two markets," She said. "But as the two markets are gradually merged, evaluations of stock value tend to converge."

New economic and trade office

In order to promote financial cooperation between the two business hubs, the Hong Kong SAR Government just opened a new economic and trade office (ETO) in Shanghai on February 1. The office aims to promote economic and trade relations between Hong Kong and Shanghai, east China's Jiangsu, Zhejiang and Anhui provinces and central China's Hubei province. It will help the tertiary industry of Hong Kong to enter the mainland market.

"China's finance industry is pretty weak compared with its soaring national strength. It's essential for the two different financial systems to make use of their respective advantages and cooperate," said Henry Tang on the opening ceremony.

Shanghai was willing to deepen the cooperation with Hong Kong on finance, trade, city planning, management and expertise exchanges in accordance with the mainland's Closer Economic Partnership Arrangement (CEPA) with Hong Kong, said Han Zheng.

With the opening of the new office, the Shanghai ETO is moving full steam ahead to promote economic relations and cooperation between Hong Kong and the Yangtze River Delta as well as its neighboring areas.

Speaking at the opening ceremony's gala dinner, Tang said the timely establishment of the Shanghai ETO would not only strengthen Hong Kong's trade and economic ties and exchanges with Shanghai and the four provinces but also help move forward relevant items in Hong Kong's Action Agenda under the 11th Five-Year Plan.

"The implementation of CEPA has widened the scope for economic and trade cooperation between Hong Kong and the region, and the extension of the 'Individual Visit Scheme' to Shanghai and the capital cities of the four provinces has brought the people of the two places closer," Henry Tang said.

"The 11th Five-Year Plan has explicitly supported Hong Kong's development of service industries in such areas as financial services, logistics, tourism and information services," Henry Tang said. "It also gives recognition to our edge in modern service industries and their contributions towards the country's continued economic growth."

"Hong Kong, with its proven edge, can serve as the gateway and platform for the mainland to 'go out', thus contributing to the country's economic development," Tang continued.

Echoing Tang, Director of Shanghai ETO, Patrick Chan, said the operation of the new office marked "the dawning of a new era" in Hong Kong's relationships with the four provinces and Shanghai.

"Our exchanges and cooperation with these places will be more frequent and closer in future," Chan said.