The general empirical evidence and the case studies presented in Chapter 6 suggest that cross-listing affects Chinese companies’ governance and financial performance in a generally favorable manner, although some companies fail after listing. This chapter moves forward from the firm level to the market level. Cross-listing may affect not only cross-listed companies but, less directly, the laws and market institutions of their home country. As a result, it may lead to the convergence of the host market and the home market. Numerous studies in the literature have been devoted to the investigation of common trends among stock markets. So far most of the studies have focused on developed markets. They find considerable evidence that supports the presence of long-term co-movements among equity markets.1 With the trend towards internationalization of equity markets, the role of emerging equity markets becomes more important in the global capital market. Studies like those of Garrett and Spyrou extend the investigation to emerging markets, including those in the Latin American and Asia-Pacific regions.2 However, few have included China in their studies, despite its growing importance in the world. One contribution of the remaining body of this book is to bridge the gap in the literature by giving crosslisting a market and legal system-level explanation, and seeing whether there exists any integration between the Chinese and Hong Kong stock markets. Various factors may oblige Chinese legislatures to battle with international exchanges by enacting reform legislation. However, this race is doomed to be difficult as regards Hong Kong due to the existing regulatory gap between the Chinese and Hong Kong markets. However, when the Chinese markets deepen, the regulatory gap will be inevitably reduced along with minimizing bonding premiums. Consequently, cross-listing will become less attractive to companies. In spite of this, Hong Kong, because of its long historic roots in finance, may still have some core competencies to offer. In light of the above, the next two chapters examine the role of cross-listing in Chinese legal and regulatory reform and in the integration of the Chinese and Hong Kong stock markets. Chapter 7 explores the extent to which China has improved its legal infrastructure and market institutions when facing fierce competition from other markets. Chapter 8 discusses the contributions of dual-listing and regulatory cooperation to such integration.