On July 4, the trading of exchange traded open-end funds (ETFs) under the trading interconnection mechanism between the mainland and Hong Kong stock markets (hereinafter referred to as "interconnection") officially opened, which has also become another landmark event in the capital market. Wind statistics show that as of July 4 this year, since the opening of the Shanghai Shenzhen Hong Kong connect, the cumulative net purchase amount of northbound funds has exceeded 1.7 trillion yuan, and the cumulative net purchase amount of southbound funds has exceeded 2 trillion yuan. Market participants said that ETF products were officially included in the subject of interconnection, which is another major measure to deepen cooperation between the capital markets of the two places and further implement high-level opening-up since the opening of interconnection. ETF interconnection targets will add new investment targets for north-east funds and south-east funds, and will further introduce long-term allocation funds into the two markets, which also means that the internationalization process of the A-share market is further advanced. The first 87 ETFs were opened for trading, and the capacity of new trading instruments was expanded According to the announcement of the exchange, 87 ETFs were officially included in the Shanghai Shenzhen Hong Kong connect. Including 53 Shanghai Stock connect ETFs, 30 Shenzhen Stock connect ETFs and 4 Hong Kong stock connect ETFs. Mainland investors can buy 4 Hong Kong stock ETFs through the Shanghai Hong Kong stock connect and Shenzhen Hong Kong stock connect, while international investors can buy 83 A-share ETFs through the Shanghai Shenzhen Stock connect. "The northbound 'ETF connect' covers a wide range of products with a wide range of types, including not only core broad-based products such as gem ETF and Shanghai Shenzhen 300etf, but also representative industry theme products such as chip ETF, carbon neutral ETF and 5getf, mainly in the fields of advanced manufacturing, digital economy and green low-carbon. Due to the scarcity of relevant investment products and sectors in the Hong Kong stock market, it has a strong configuration attraction for international investors Gravitation helps it invest in the mainland market more conveniently. " Xuanwei, chief strategist of Huaxia Fund, said in an interview with the economic information daily that at present, ETFs investing in a shares in the local market in Hong Kong are still concentrated on the main broad-based indexes. In recent years, the mainland stock ETF market has been deeply subdivided, and industry themed ETFs have sprung up rapidly, accounting for half of the whole market, such as ETFs in securities, banking and other industries, as well as popular theme ETFs such as 5g, chips, consumption, new energy vehicles and so on, Some featured products have strong configuration attraction to overseas investors. Fang Dongming, China head of UBS's global financial markets department, also stressed that for both investment and trading overseas investors, a richer ETF target will improve the efficiency of investment decision-making and enrich the trading strategies in the Chinese market, especially involving some unique themes and scarce industry types in the mainland stock market. For mainland investors, ETF can optimize their investment portfolio and provide ways and convenience for their global allocation. 20 public funds are the first to benefit, and the incremental funds are expected to accelerate the entry "Under the background that interconnection has become the main way for foreign capital to allocate A-shares, after further enriching the investable varieties of foreign capital and improving its investment convenience, the ETF market is expected to usher in incremental funds. With the opportunity of this expansion, it is expected to inject more funds into the mainland real economy, and at the same time, it also provides more opportunities for international capital and financial institutions to invest in the Chinese market." Dongdengxin, director of the Institute of Finance and securities at Wuhan University of science and technology, said. China Southern Fund said that wind data showed that among the stock ETFs listed on the Hong Kong stock exchange, the total scale of funds invested in A-shares had exceeded 50billion yuan, reflecting the investment demand of overseas markets for A-share ETFs. In the future, interconnection is expected to introduce diversified incremental funds for mainland A-share ETFs. On the first day of trading on July 4, mazhiping, head of Greater China equity business of Goldman Sachs' global markets department, said that the agency's trading team had completed a number of ETF transactions under the interconnection mechanism. As a financial institution that can support overseas institutions to invest under QFII and all interconnection mechanisms, Goldman Sachs expects that more foreign capital will flow into China's financial market through ETF interconnection mechanism in the future. It is worth noting that the first batch of 83 northbound qualified ETF products involved 20 public funds with a total scale of more than 671.7 billion yuan. Among them, GF, Huaxia, Cathay Pacific and e-fund ranked first, with 12, 10, 8 and 7 respectively. Further progress in the internationalization of capital market With the deepening of the opening-up strategy, ETF will become an important carrier for the opening-up of the capital market, and the ETF interconnection mechanism will be further expanded, which will help to continue to promote the internationalization of China's capital market. Caijianchun, general manager of Shanghai Stock Exchange, said that in recent years, the turnover of the Shanghai Hong Kong stock connect has gradually increased, with a cumulative turnover of 52 trillion yuan. Next, the Shanghai Stock Exchange will further strengthen the exchange and cooperation with the Shenzhen Hong Kong stock exchange, the clearing companies of the two places and market participants, continue to optimize the interconnection and other mechanism arrangements, actively create a market environment conducive to the entry of medium and long-term funds into the market, and promote the in-depth cooperation and coordinated development with the Hong Kong market. Sha Yan, general manager of Shenzhen Stock Exchange, pointed out that the inclusion of ETF in the subject matter of interconnection is conducive to enriching cross-border investment varieties, providing more investment convenience and opportunities for domestic and foreign investors, and promoting the sustained, stable and healthy development of the two markets. It is an important measure to implement the national strategic deployment of opening up, support the Hong Kong market to consolidate and enhance the status of an international financial center, and is also another landmark achievement in deepening the interconnection mechanism. "Since the implementation of the QFII (Qualified Foreign Institutional Investor) system in 2002 and the rqfii (qualified foreign institutional investor in RMB) system in 2011, the pace of opening up China's capital market has continued to accelerate. The inclusion of ETF in connectivity reflects the further deepening of the opening up of China's capital market." Chen Li, chief economist of Chuancai securities, said. (Xinhua News Agency)