Hong Kong investors have been excited about the central government's initiative to link the Hong Kong and Shanghai stock exchanges. But the implication goes way beyond anticipated gains from stock trading; it will give a further boost to economic integration between the two sides.

Much of Hong Kong's economic success has been credited to the city's competitive edge - such as its huge pool of talented people, the rule of law, etc - with the mainland factor being easily overlooked.

But history tells that a solid economic hinterland is an indispensable element in making an international business center, be it a trading, shipping, or financial one. The absence of this element has made many great cities fail to become international business hubs despite their advanced social and political situations.

Economic cooperation and integration between the mainland and Hong Kong over the years has provided the city with this key factor for its economic success.

The city has become an international hub for trade as well as shipping and logistics by serving the mainland's strong need for exports and imports. It has also become an international financial center by serving as a reliable finance platform for mainland companies.

The new initiative, the so-called "through train between the Shanghai and Hong Kong exchanges", will further enhance economic integration between the two sides.

Under this scheme, further details of which were announced by regulators on Tuesday, Hong Kong and mainland investors will soon be allowed to trade stocks in each other's market directly via a connection between their stock exchanges.

Undoubtedly, Hong Kong's status as an international financial center will be further strengthened.

The city's stock exchange will prove to be more attractive to international investors by providing a handy platform to invest in the mainland market and benefit from its vigorous economic growth.

Hong Kong's role as a premier hub for offshore yuan businesses will also received a big boost as its yuan pool expands along the progress of the new scheme.

Most important of all, the new arrangement signals a more active and significant role for the city in the process of the country's further economic reform as well as its integration into the global economy.

It is hoped that this role for Hong Kong and its relevance to national development won't be derailed by the current political bickering in the city.

(HK Edition 04/30/2014 page9)