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Opinion

The promise of China's Stock Connect betrayed

Beijing is still not ready to relax its grip on markets

| China
China's Stock Connect, launched in November 2014, started as a bold experiment in openness but has turned into a proof of Beijing's penchant for micro-management.   © Reuters

When the first Stock Connect share trading link opened between Hong Kong and mainland China three years ago, it stood out as a genuinely original development in cross-border portfolio flows.

For the first time, individual investors could buy shares across the Chinese frontier without applying for regulatory approval. Investors from either side of the border could trade across based on customary "know-your-customer" standards of broker disclosure. Investment and trading volume quotas appeared sufficient. Shanghai-Hong Kong Stock Connect indeed marked a creative use of two distinct exchange frameworks that had been operating independently within China.

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