On the condition that the [renminbi's] convertibility is realized, the Hong Kong dollar may be pegged to the [renminbi] instead of the dollar in the future.
China's rise to prominence in the financial sphere – at last beginning to catch up with its long-standing powerful economic growth and growing importance in world trade – was symbolized in April 2007, when mainland China's stock exchanges in Shanghai and Shenzhen for the first time overtook Hong Kong in terms of total market capitalization. Although Hong Kong still had a substantial lead in initial public offerings (IPOs) in 2006 (Table 10.1), a majority of these funds were generated by the IPOs of two of mainland China's own state-owned banks (Chapter 7) – which on their own accounted for over $US 25 billion of the $US 41.22 billion total. Moreover, the Chinese authorities had kept the Shanghai and Shenzhen exchanges closed to new listings during the first half of 2006. Total mainland China IPOs were expected to exceed $US 52 billion during 2007. A senior Hong Kong banker was quoted as saying that “[a]uthorities in Hong Kong are going to have to work very hard to maintain the dominance and relevance of the bourse” (Kwong, Tucker, and Gangahar, 2007, p. 1).
There have been reports of the Shanghai Stock Exchange making new efforts to encourage listings by prominent foreign companies like HSBC (Dyer and Tucker, 2007).