H-Shares vs. A-Shares: What's the Difference?

H-Shares vs. A-Shares: An Overview

Buying shares of publicly traded companies in the People's Republic of China (PRC) are not quite as simple as buying shares of stock in the United States. While shares traded on public markets in the United States are generally available to anyone who has the money to pay for them, the Chinese stock markets have strict restrictions on who can buy and what is available to them for purchase. The distinctions are important to know if you want to start trading or investing there.

Publicly traded companies in China generally fall under three share categories:

  • A-shares represent publicly listed Chinese companies that trade on Chinese stock exchanges such as the Shenzhen and Shanghai Stock Exchanges. These stocks trade in yuan renminbi (CNY).
  • B-shares are Domestically Listed Foreign Investment Shares. They list on the Shenzhen and Shanghai exchanges, and trade in foreign currencies.
  • H-shares, traded on Hong Kong's exchanges, are regulated by Chinese law and are freely tradable by anyone. These shares trade using the Hong Kong dollar (HKD).

Depending on where they are listed, all three shares may have renminbi denomination but trade in varying currencies.


Chinese A-shares are the shares of incorporated companies based in mainland China that are listed on either the Shanghai or Shenzhen stock exchanges. A-shares are generally only available for trading to mainland Chinese citizens. However, foreign investment in these companies is allowed through a regulated structure. Some institutional investors may qualify as Qualified Foreign Institutional Investors (QFIIs) or other strict trading programs. Only a select group of institutional investors have qualified for QFII status and can buy and sell Chinese A-shares.

After 2007, China let mainland Chinese investors purchase either A-shares or H-shares of companies listed on the Shanghai Stock Exchange. Before that, Chinese mainland investors could purchase only A-shares, even though H-shares were also offered. Since foreign investors may trade H-shares, the shares are more liquid than A-shares.

A-shares are issued in China under Chinese law and are quoted in Chinese yuan or renminbi. For American investors who are not QFII qualified, the only way to access these shares may be through an emerging market fund or by investing in American depositary receipts (ADRs).

MSCI Emerging Markets Index

There has been a great deal of effort to give individual foreign investors a greater opportunity to put their money into A-shares. One way investors can do so is by looking at different investment opportunities that may include A-shares like exchange-traded funds (ETFs) and other funds.

In 2020, the MSCI Emerging Markets Index was weighted 40.95% in the Chinese market and partially includes large-cap A- and mid-cap-A-shares from China. In 2018, the same index held 32.72% in the Chinese market. In February 2019, the firm announced it was increasing its weight of large-cap A-shares from 15% to 20% by November 2019—a move it said was well-received by investors. By the end of the move, the firm said it would have 253 large-cap and 168 midcap A-shares in the index.


B-shares also made up of incorporated Chinese companies, are quoted in foreign currencies such as the U.S. dollar (USD) and the HKD, depending on the listing exchange. B-shares are more widely available to foreign investors.


Chinese H-shares represent the shares of publicly-traded incorporated Chinese companies listed on the Hong Kong Stock Exchange. H-shares are issued in China under Chinese law and are subject to the Hong Kong Stock Exchange's listing requirements.

The rules state that annual accounts must follow Hong Kong or international accounting standards. Also, a company’s articles of incorporation must include sections clarifying the varying nature of domestic shares and foreign shares, including H-shares, as well as the rights given to each purchaser.

Unlike A-shares listed on the Shanghai or Shenzhen stock exchanges and trading in Chinese renminbi, H-shares quote, and trade with a face value of Hong Kong dollars. H-shares are also open for all investors to trade.

There are usually price discrepancies between a company's A-shares and H-shares. Also, A-shares generally trade at a premium to H-shares.

Special Considerations

One way to invest in China is through an American Depositary Receipt (ADR). These certificates, which represent a number of shares of foreign companies, are traded on the U.S market. ADRs remove any restriction for investors who cannot, otherwise, invest in a foreign entity. And since they trade on American exchanges, they're valued in U.S. dollars, so there are no issues with pricing, and currency values or exchanges.

Another consideration is Shanghai-Hong Kong Stock Connect, a system designed to give investors mutual market access. The idea behind the system was to link both the Shanghai and the Hong Kong Stock exchanges and give investors a chance to trade shares in each market using their own brokers. Established in 2014, Stock Connect gives foreigners an opportunity to buy A-shares without the typical restrictions they come with. All transactions are conducted in CNY—not in Hong Kong dollars.

Key Takeaways

  • A-shares are shares of companies based in mainland China that are listed on either the Shanghai or Shenzhen stock exchanges.
  • A-shares are generally only available for trading to mainland Chinese citizens.
  • H-shares of Chinese companies listed on the Hong Kong Stock Exchange are quoted and trade with a face value of Hong Kong dollars.
  • H-shares are open for trading to all investors.
Article Sources
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  4. MSCI. "The Rise of Emerging Markets and Asia: Equity-Market Size May Not Reflect the Underlying Economy Chart," Move Year of Analysis Sliding Scale to "2020."

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