How to Choose Hong Kong Stock Investments? A Comparison of Huatai Securities Stock Connect vs. Direct Accounts

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When investing in Hong Kong stocks, the two common channels are Stock Connect and direct Hong Kong stock accounts. You can choose based on your investment needs, fund size, and operational preferences. Account opening thresholds, trading varieties, fund flows, fees, taxes, and convenience are factors you must consider. Huatai Securities Stock Connect allows you to quickly participate in Hong Kong stock investments using an A-share account in China, with a simple process and centralized fund management.

Key Points

• Hong Kong stock investments mainly involve two channels: Stock Connect and direct Hong Kong stock accounts, with choices depending on fund size, investment varieties, and operational habits.
• Stock Connect is suitable for investors with funds exceeding $70,000 who prioritize operational convenience and fund safety, offering simple account opening, centralized fund management, and low trading fees.
• Direct Hong Kong stock accounts provide a broader investment scope, including IPO subscriptions, ETFs, and diverse products, but involve complex fund flows and risks from exchange rates and cross-border transfers.
• Beginners are advised to prioritize Stock Connect to reduce learning costs and fund risks; frequent traders and large-scale investors can flexibly choose channels based on needs.
• Before investing, you should focus on account requirements, fee structures, and tax policies, and rationally choose the most suitable Hong Kong stock investment method based on your situation.

Selection Factors

Account Opening Thresholds

When choosing a Hong Kong stock investment channel, the account opening threshold is a primary consideration. Huatai Securities Stock Connect requires your account assets to be at least 500,000 RMB (approximately $70,000, calculated at 1 USD = 7.1 RMB), and as long as you have an A-share account, you can quickly activate it via mobile or computer without additional account opening. Direct Hong Kong stock accounts have no fund threshold, but you need to prepare ID, bank card, phone number, and email. You can submit applications online via computer or app, typically completing the review within 1-2 business days. Some brokers require an initial deposit of 10,000 HKD (approximately $1,280), but account opening itself is free. You should note that most brokers no longer accept Chinese ID for account opening, with only a few like Futu Securities and Longbridge Securities still supporting it.

Investment Scope

Huatai Securities Stock Connect allows you to invest in a designated range of Hong Kong stocks, such as Hang Seng Composite Large Cap, Mid Cap, and Small Cap stocks, with limited coverage. Direct Hong Kong stock accounts let you invest in nearly all stocks listed in Hong Kong, including main board, GEM, IPO subscriptions, ETFs, REITs, and more, offering a richer selection.

Fund Flows

Through Huatai Securities Stock Connect, your funds flow within your Chinese brokerage account, making fund transfers and settlements convenient. You don’t need to consider cross-border remittances or exchange rate conversions. Direct Hong Kong stock accounts require you to transfer funds from a Chinese bank account to a Hong Kong bank account, involving cross-border transfers and exchange rate fluctuations. You can deposit funds using a Chinese bank card, but withdrawals typically require a Hong Kong bank card, making the fund flow process more complex.

Trading Fees

Huatai Securities Stock Connect offers low trading commissions with a transparent fee structure. You only need to pay brokerage commissions, exchange fees, and stamp duty. Direct Hong Kong stock account commissions vary by broker, with some internet brokers offering low or even zero-commission promotions, but you also need to bear remittance fees and potential exchange rate losses.

Operational Convenience

When using Huatai Securities Stock Connect, you manage both A-shares and Hong Kong stocks with a single account, with a familiar interface supporting mobile and computer trading. Direct Hong Kong stock accounts require you to adapt to a new trading system, with some brokers’ apps supporting Chinese interfaces, but the overall process is more complex than Stock Connect.

Fund Safety

Huatai Securities Stock Connect funds are managed uniformly by Chinese brokers and protected by Chinese laws. Direct Hong Kong stock account funds are held by Hong Kong brokers and banks, regulated by Hong Kong laws. You need to choose reputable, licensed brokers to ensure fund safety.

Huatai Securities Stock Connect

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Advantages

When choosing Huatai Securities Stock Connect, you can enjoy a very convenient account opening process. You only need a Huatai Securities A-share account without opening a new one. You can operate directly on your mobile or computer, completing activation in minutes. Your funds are all centralized in the Huatai Securities account, making management convenient. You don’t need to worry about cross-border remittances or exchange rate conversions. Trading commissions are low, with a clear fee structure. You only pay brokerage commissions, exchange fees, and stamp duty. You can also manage A-shares and Hong Kong stocks with one account, with a familiar interface, reducing learning costs. For those with large funds or frequent trading needs, this method significantly improves efficiency.

Limitations

When investing in Hong Kong stocks through Huatai Securities Stock Connect, the investment scope is limited. You can only trade stocks within the designated range, such as Hang Seng Composite Large Cap, Mid Cap, and Small Cap stocks. You cannot participate in all Hong Kong-listed IPO subscriptions, GEM, certain ETFs, or REITs. You also face trading time restrictions, unable to participate in pre-market or after-hours trading. While funds are centrally managed, they cannot be directly transferred to Hong Kong bank accounts. You also need to meet the account asset threshold of at least 500,000 RMB (approximately $70,000, calculated at 1 USD = 7.1 RMB).

Suitable Audience

If you already have a Huatai Securities A-share account with funds exceeding $70,000, and prioritize operational convenience and fund safety, Huatai Securities Stock Connect is very suitable for you. If you want to avoid handling cross-border remittances and exchange rate fluctuations and prefer a familiar trading system to manage A-shares and Hong Kong stocks, this method saves time and effort. If you are a frequent trader or large-scale investor, you can achieve lower trading costs and higher fund efficiency through Stock Connect.

Direct Hong Kong Stock Accounts

Advantages

When choosing a direct Hong Kong stock account, you can invest in nearly all stocks listed on the Hong Kong market. You can trade not only main board and GEM stocks but also participate in IPO subscriptions, ETFs, REITs, and other products. There is no fund threshold, and account opening does not require a minimum asset balance. You can open accounts online through internet brokers like Futu Securities and Longbridge Securities, with a simple process. You can also choose different Hong Kong brokers based on your needs, enjoying diverse services and promotions. Some brokers offer low or even zero-commission incentives.

Limitations

You need to prepare a Hong Kong bank account or a bank card supporting HKD transactions. When managing fund flows, you need to convert USD or RMB into HKD and transfer it to a Hong Kong bank account. You will face risks from exchange rate fluctuations. For withdrawals, you typically can only transfer funds back to a Hong Kong bank account, making the process more complex. You also need to bear cross-border remittance fees. During operations, you need to adapt to new trading systems and interfaces. You should also note that some brokers have restrictions on Chinese ID account openings, and policies may change at any time.

Tip: When transferring funds cross-border, you should understand exchange rates (e.g., 1 USD = 7.1 RMB) and related fees in advance to plan funds appropriately.

Suitable Audience

If you have a Hong Kong bank account or an overseas bank card and want to invest in a wider range of Hong Kong stock products, a direct Hong Kong stock account is suitable for you. If you understand fund flows and exchange rate risks and are willing to spend time adapting to a new trading system, this method offers broader investment opportunities. If you have smaller funds or want to participate in IPO subscriptions, ETFs, or other diverse products, you can prioritize a direct Hong Kong stock account.

Key Comparisons

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Account Requirements

When choosing an investment channel, you first need to consider account requirements.

• If you choose Huatai Securities Stock Connect, you need a Huatai Securities A-share account with assets of at least $70,000 (calculated at 1 USD = 7.1 RMB). You can activate Stock Connect directly using your existing account without opening a new one.
• If you choose a direct Hong Kong stock account, there is no fund threshold. You only need to prepare an ID, bank card, phone number, and email to apply through internet brokers like Futu Securities or Longbridge Securities. Some brokers require an initial deposit of $1,280 (approximately 10,000 HKD, 1 USD = 7.8 HKD). You also need a Hong Kong bank account for fund transactions.

Investment Varieties

The range of investable varieties directly affects your choice.

• Through Huatai Securities Stock Connect, you can only invest in stocks within the designated range of the Hong Kong Stock Exchange, including Hang Seng Composite Large Cap, Mid Cap, and A+H share companies’ H-shares.
• Through a direct Hong Kong stock account, you can invest in all Hong Kong-listed stocks, as well as trade derivatives like warrants and callable bull/bear contracts, and financial products like funds and ETFs.

If you want to participate in IPO subscriptions, ETFs, REITs, or derivatives, a direct Hong Kong stock account is more suitable for you.

Fund Management

You will have different experiences in fund management.

• Choosing Huatai Securities Stock Connect, your funds are centralized in the Huatai Securities account. You don’t need to worry about cross-border remittances or exchange rate conversions. Fund transfers and settlements are convenient.
• Choosing a direct Hong Kong stock account, you need to convert USD or RMB into HKD and transfer it to a Hong Kong bank account. For withdrawals, you also need to transfer funds back to a Hong Kong bank account. You should pay attention to exchange rate fluctuations and cross-border transfer fees.

Fee Structure

You will encounter different fees during trading.

• Huatai Securities Stock Connect has lower commissions with a clear fee structure. You only pay brokerage commissions, exchange fees, and stamp duty.
• Direct Hong Kong stock account commissions vary by broker. Some internet brokers offer low or zero-commission promotions, but you also bear remittance fees and exchange rate losses.

When choosing, you can compare commissions and promotions across brokers to control investment costs effectively.

Tax Handling

You need to be aware of differences in tax handling.

• Investing through Huatai Securities Stock Connect, your tax handling is relatively simple. You only need to pay Hong Kong stamp duty, with other taxes withheld and paid by the broker.
• Investing through a direct Hong Kong stock account, you need to understand Hong Kong tax policies. You may need to declare capital gains tax or dividend tax. You also need to stay updated on changes in Chinese personal income tax policies.

Operational Experience

You will experience clear differences in operational experience.

• Huatai Securities Stock Connect allows you to manage A-shares and Hong Kong stocks with one account, with a familiar interface and simple operations. You can trade anytime via mobile or computer.
• Direct Hong Kong stock accounts require you to adapt to a new trading system. Some brokers’ apps support Chinese interfaces, but the overall process is more complex than Stock Connect. You also need to manage a Hong Kong bank account for fund inflows and outflows.

If you prioritize convenience and efficiency, Huatai Securities Stock Connect will save you effort. If you prefer a broader range of investment varieties and are willing to adapt to a new system, a direct Hong Kong stock account offers greater freedom.

Scenario Recommendations

Beginner Investors

When starting with Hong Kong stock investments, you should prioritize simple operations and high fund safety channels. Stock Connect offers a convenient account opening process. You only need an A-share account meeting the $70,000 (1 USD = 7.1 RMB) asset threshold to activate quickly via mobile or computer. You don’t need to worry about cross-border fund transfers or learning a new trading system. You can trade Hong Kong stocks within a familiar interface, reducing learning costs. If your funds are smaller or you cannot meet Stock Connect’s asset requirements, you can choose an internet broker to open a direct Hong Kong stock account. You only need an ID, bank card, and email, with some brokers supporting fast online reviews. You should note that direct accounts involve transferring funds to a Hong Kong bank, which is relatively complex. You can practice with a demo account first and invest formally after gaining familiarity.

Tip: For beginner investors, start with small funds to gain experience and avoid losses due to operational errors.

Frequent Traders

If you are a high-frequency trader focusing on trading efficiency and costs, both Stock Connect and direct Hong Kong stock accounts have advantages. Stock Connect offers lower commissions and centralized fund management, suitable for flexibly switching between A-shares and Hong Kong stocks. You can quickly complete trades, reducing fund transfer times. If you pursue a wider range of investment varieties, such as warrants or callable bull/bear contracts, a direct Hong Kong stock account is more suitable. Some internet brokers offer low or zero-commission promotions, effectively reducing trading costs. You need to consider exchange rate fluctuations and cross-border remittance fees, which will affect your actual returns. You can choose the optimal channel based on your trading frequency and investment variety needs.

For frequent trading, regularly compare brokers’ commissions and promotions to control trading costs effectively.

Large-Scale Investments

If you have significant funds, with single investments exceeding $70,000 (1 USD = 7.1 RMB), Stock Connect provides an efficient and secure fund management experience. You can centrally manage funds through major brokers like Huatai Securities, enjoying higher fund safety assurances. You don’t need to worry about compliance risks from cross-border transfers or frequent exchange rate conversions. You can flexibly allocate A-share and Hong Kong stock assets within one account, improving fund efficiency. If you want to invest in a broader range of Hong Kong stock products or have overseas asset allocation needs, a direct Hong Kong stock account is also worth considering. You can diversify funds across different brokers and banks, enhancing asset diversification.

For large-scale investments, prioritize fund safety and compliance, choosing brokers with strong reputations and regulatory qualifications.

Special Needs

If you have specific investment needs, such as participating in IPO subscriptions, investing in ETFs, REITs, or derivatives, a direct Hong Kong stock account offers broader choices. You can invest in nearly all Hong Kong-listed products, flexibly allocating assets. If you have a Hong Kong bank account, fund flows will be smoother. You can also choose different brokers based on your needs, enjoying diverse services and promotions. If you prioritize operational convenience and centralized fund management, Stock Connect remains your preferred choice. You can flexibly switch investment channels based on your actual needs.

You can flexibly choose the most suitable Hong Kong stock investment method based on your fund size, investment goals, and operational habits.

When choosing a Hong Kong stock investment channel, you need to consider fund size, investment goals, and operational habits. Stock Connect is suitable for those with funds exceeding $70,000 (1 USD = 7.1 RMB), offering convenience and fund safety. Direct Hong Kong stock accounts provide a broader investment scope but involve more complex fund flows. You can rationally evaluate and choose the most suitable method based on your situation. It’s recommended to stay updated on policy changes and market trends, adjusting your investment strategy flexibly.

FAQ

What documents are needed to open a Stock Connect or direct Hong Kong stock account?

When opening Stock Connect, you only need a Chinese A-share account and to meet the asset requirements. For a direct Hong Kong stock account, you need an ID, bank card, phone number, and email.

What is the minimum asset requirement for Stock Connect, and how is it calculated?

You need account assets of at least $70,000. Calculated at 1 USD = 7.1 RMB, this is approximately 500,000 RMB. You can check your total assets in the broker’s app.

What fees are involved in transferring funds from China to a Hong Kong bank account?

When transferring funds, banks charge handling fees. You also bear exchange rate conversion fees. Fees vary by bank, so consult your Hong Kong bank in advance.

Are there differences in trading hours between Stock Connect and direct accounts?

With Stock Connect, you can only trade during the Hong Kong Stock Exchange’s regular trading hours. With a direct account, you can participate in pre-market and after-hours trading, offering more flexible timing.

What taxes are required for Hong Kong stock investments?

When investing in Hong Kong stocks, you need to pay Hong Kong stamp duty. Through Stock Connect, brokers automatically withhold it. With a direct account, you need to understand relevant tax policies yourself.

After a thorough comparison of Huatai Securities’ Stock Connect and direct Hong Kong stock accounts, it’s clear that each channel has its unique advantages and limitations. Stock Connect is convenient and secure but has a limited investment scope; a direct account is flexible but involves complex fund transfers and exchange rate risks. This dilemma often confuses investors. BiyaPay was created to solve these pain points, offering a more comprehensive and efficient cross-border financial solution. We support the conversion between various fiat and digital currencies, allowing you to invest in both U.S. and Hong Kong stocks on one platform without a complex overseas bank account, easily achieving asset diversification. With our real-time exchange rate query feature, you can always seize the optimal conversion opportunities and ensure every transaction is worthwhile with a remittance fee as low as 0.5%. Say goodbye to cumbersome processes and non-transparent fees, and register with BiyaPay today to begin your new era of smart investing.