'Twin Stars' of Finance: Hong Kong, Shanghai Celebrate Closer Union

As Hong Kong observed the 29th anniversary of its handover to Chinese sovereignty by the British, the financial repercussions took a starring role.

"China is the only country in the world with two world-class financial centers that steadily topped on our list in the past decade," said Mike Wardle, chief executive of London-based Z/Yen Group, which compiles the Global Financial Centers Index Report.

In the latest survey of 120 cities, released in March, Hong Kong ranked third and Shanghai sixth.

For many years, some people regarded Hong Kong and Shanghai as rivals in financial services, but in reality, the two play off one another's strengths. That became even more evident in 2025, when the two cities signing a mutual action plan at the Lujiazui Forum in Shanghai. At this year's forum, held in mid-June, there was a special panel convened to discuss those evolving relations, with Wardle invited as a guest.

"Hong Kong and Shanghai have different advantages in the growth of their financial sectors," Fang Xinghai, former deputy chairman of China Securities Regulatory Commission, told the panel discussion. "Those advantages are complementary."

Fang said many foreign investors prefer Hong Kong as a hub for their regional funds because capital can move more freely through the city and the Hong Kong dollar is free floating. The operation of the Shanghai-Hong Kong Stock Connect program has made Chinese mainland shares more accessible to foreigners.

Hong Kong's crown as the world's biggest IPO market in 2025 was driven by IPOs by Chinese mainland companies. That trend is continuing this year, resulting in many companies listed both in Hong Kong and on Chinese mainland exchanges.

In the first five months of this year, 60 of the 61 IPOs in Hong Kong were from Chinese mainland companies, with a long line of applicants in the pipeline.

The most recent case went to China electronics company Luxshare Precision Industry, an Apple supplier, which has filed an application for a listing in Hong Kong, seeking to raise as much as HKS$24.3 billion (US$3.1 billion) through the sale of 383.5 million shares. It is expected to begin trading on July 9.

And this Tuesday, one day ahead of the celebration of Hong Kong's return to Chinese sovereignty, was another big day for Chinese companies launching IPOs in Hong Kong: Chaozhou Three-Circle, which makes electronic ceramic materials and parts used in electronics, cars and chip equipment, was seeking to raise HK$7.2 billion; Nexchip Semiconductor, aimed for HK$6.9 billion; Dtech Technology, a maker of tiny drill bits and other tools used to produce printed circuit boards, sought to raise up to HK$4.8 billion; and Rokae Robotics Group came with a HK$875 million share offer.

"The two cities are twin stars, both indispensable for China's financial-sector growth," Fang said.

Meanwhile, some panelists urged stronger ties between both cities in commodities trading, along with strengthened partnerships in sectors such as reinsurance and wealth management.

Hong Kong Financial Secretary Paul Chan Mo-po, a frequent visitor to Shanghai, said there is ample room for more integration between Shanghai and Hong Kong. The city is currently drawing up its first five-year plan to align itself more closely with China's development timetable.

"Coordination should manifest in real-life scenarios," Chan said. "That may be a Shanghai lab securing venture capital from Hong Kong investors, or a Hong Kong analyst crafting cross-border solutions for Chinese mainland companies, or a wider array of investment opportunities in a more unified market."

Hong Kong has been promoting its services aimed at helping Chinese companies go global. The city last year set up a task force that organized roadshows to take Chinese mainland companies to Southeast Asia, the Middle East, Central Asia, Africa and South America – markets with untapped potential for growth.

Hong Kong is also making efforts to attract Chinese tech companies to set up operations in the city, allocating land for industrial parks to house them, according to Loretta Lee, associate director-general of Invest Hong Kong, during an event in Shanghai to celebrate the 29th anniversary of Hong Kong's handover to Chinese sovereignty.