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China’s growth economically has actually slowed from nearly 12% in 2012 to seven percent for the first quarter of 2015, but the Shanghai Stock Exchange Composite Index has gained 100% in one year. China bubble or not, investors should pay close attention.
Shanghai-Hong Kong Stock Connect, announced in April of 2014, is a cross-boundary trading program that opened the door for mutual market access between the Mainland China exchange, the Shanghai Stock Exchange, and the Hong Kong Stock Exchange. (Source: Hong Kong Exchanges and Clearing Limited web site, last accessed April 15, 2015.)
Before the announcement, investing in publicly listed Mainland China stocks was limited to foreigners and until 2005, restrictions were even placed on Chinese investors. This all changed with the Shanghai-Hong Kong Stock Connect. The Shanghai Composite is up from 2,101 in April 2014 to its close at 4,135 on April 15, 2015.
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