Shenzhen’s new initiatives to deepen reform and opening-up present an opportunity for Hong Kong, with measures aimed at strengthening Hong Kong’s financial ties with the Chinese mainland market and promoting the high-level openness of the country’s capital market, experts said.

The central government issued a guideline on Tuesday to advance Shenzhen’s reform and opening-up, encouraging the city to remove institutional barriers, strengthen resource integration, deepen collaboration within the Guangdong-Hong Kong-Macao Greater Bay Area, and develop into a modernized, internationalized, and innovative city.

Some of these measures are closely related to Hong Kong. They include allowing Greater Bay Area enterprises listed on the Hong Kong Stock Exchange to raise funds on the Shenzhen Stock Exchange, as well as permitting eligible Hong Kong tax professionals to practice in specific areas in Shenzhen.

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Yu Lingqu, deputy director of the department of finance industries at the China Development Institute, a Shenzhen-based think tank, praised the dual-listing measure as a significant policy breakthrough for boosting the cross-border financial market connectivity.

Currently, companies listed on the Hong Kong or US stock markets that wish to list on the A-share market will need to undergo privatization and delist from overseas markets — as Shenzhen-based Mindray Medical, a global provider of medical devices and solutions, did in 2016 — or make spin-offs.

Due to the complicated process and high costs, very few companies opt for this route.

Under the new rule, Yu said he believes more firms will be encouraged to pursue listings on the Hong Kong Stock Exchange, and Greater Bay Area enterprises will be able to leverage capital from both sides to accelerate growth.

Yu said that both the capital markets of Shenzhen and Hong Kong have seen a growing number of technology companies going public. Hong Kong has also adjusted its regulations to attract more promising tech enterprises — even those that are not yet profitable — to list.

Some renowned tech firms in the cluster, such as the internet giant Tencent and the new energy vehicle company Xpeng, both listed in Hong Kong, could benefit from these changes.

Yu said he hopes the new initiative will help the two cities’ exchanges attract more leading tech firms, and enhance their competitiveness in the global capital market.

These high-quality companies, which are familiar with the rules of international financial markets, can also help align the Shenzhen stock market with international financial standards and enhance its role as a regional financial hub, he added.

The new rule also presents an opportunity for companies looking to shift to the mainland market amid global uncertainties. Listing on the A-share market can deepen connections with domestic investors and boost brand recognition on the mainland, thereby benefiting their business expansion and external collaboration, Yu said.

Mindray Medical, after returning to the A-share market, reportedly experienced growth rates that were several times higher than its performance in the US market.

However, he cautioned that companies may need to make additional efforts to comply with regulatory requirements in both markets, such as financial disclosure, which could pose a challenge for smaller firms. He recommended that they leverage the expertise of professional institutions to ensure proper preparation.

Tian Lihui, professor of finance at Nankai University, expects that the measure will further empower enterprises with cross-market financing capabilities, promoting the efficient allocation of financial resources within the Greater Bay Area.

By enhancing financial synergy in the Greater Bay Area, Tian said, the region can expedite its establishment of a regional financial community and serve as a model for national capital market reforms.

Regarding another pilot initiative in the latest guideline — allowing Hong Kong tax professionals to operate in designated areas of Shenzhen — Yu said he believes this is aimed at promoting Qianhai’s successful experience to more areas, enabling Hong Kong’s professional services to benefit more Shenzhen businesses.

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Earlier, Qianhai launched facilitation measures for over 20 types of professional experts from Hong Kong and Macao, allowing them to practice there without taking the mainland professional qualification exams.

Yu noted that the overseas expansion strategies of Chinese companies have generated significant demand for Hong Kong’s legal, accounting and taxation services.

Many areas outside Qianhai, such as the Nanshan and Futian districts, also have great demand for these services.

Given the differences in tax systems between Hong Kong and the mainland, he suggested that basic assessments should still be required for Hong Kong professionals. These assessments should focus on the key distinctions between the two systems to help professionals serve mainland businesses.

Contact the writer at bingcun@chinadailyhk.com