A History of Chinese Companies Listing in Hong Kong and Its Implications for the Future

This article presents a history of Chinese companies listing on the Stock Exchange of Hong Kong. The historical perspective reveals a number of important facts. First, the birth of H-share companies is a political result rather than a private initiative. Secondly, the "bonding" strategy is an important reason that explains why Chinese companies list in Hong Kong, but it is far from the whole story. Thirdly, listing in Hong Kong serves different purposes at different historical periods incidental to the Chinese government's policy towards the construction of the domestic capital market. Most importantly, by examining the history of H-share companies, the article proposes that the current policy to expand the scope of the domestic capital market would seriously affect the number of H-share companies in the foreseeable future. Overall, government policy dictates the pattern of Chinese companies listing in Hong Kong.