IT wouldn't be difficult to under-estimate the significance of the links that were officially forged this week between Hongkong's capital markets and the mainland's corporate sector. The timing is hardly propitious. Tales of the Chinese economy hitting the wall circulate faster every day. The Shenzhen and Shanghai markets have spent this year falling through a vacuum of apathy, and there are still some question marks over the timing of the first listing allowed under the memorandum of understanding (MoU). But, beyond lies a truly great opportunity for Hongkong to demonstrate in the most practical manner possible just how much it can do for the mainland. This week has seen one country, two systems made tangible. The MoU is the sort of practical partnership that can build political stability into the relationship between the territory and mainland in a manner that transcends politics. Hongkong has a vast pool of the assets a developing mainland urgently needs. It has access to equity capital, the expertise to direct it into deserving investments, and can offer the vital advice and guidance that Chinese companies require to shape up to the demands of international investors. By building in the necessary mechanism to ensure maximum investor protection, the authorities on both sides of the agreement will automatically produce a series of targets and disciplines that will assist the mainland companies in formulating their business strategies. Directors of the mainland companies will have to recognise that management and ownership are not exclusive - but there are a lot of Hongkong companies whose views on the rights of minorities are pretty ambivalent. With the capital that a Hongkong listing can generate will come a lot of responsibilities. Corporate officers are going to find themselves being questioned by informed analysts in a way that they are far from used to. For while the listing requirements lay down some basic rules on corporate responsibilities, the process of putting the companies into line with Western accounting and legal standards still has a long way to go. As the serious business of preparing companies for listing progresses, players on both sides are going to have to take a realistic approach to pricing. It is not enough to say that China has the most exciting economic prospects in the world, with a market of 1.8 billion people, so anything that comes out of the country is an automatic buy. All will have their price, and it will help no one if the initial offerings are pitched too high. At the right price, there will undoubtedly be demand, because investors, for the first time, will be getting pure China plays that will offer real liquidity and can be traded on a recognised market with which they feel happy. There will definitely be a much more realistic assessment of the prospects of the mainland listings than was the case in the early days of the B shares. Every emerging market has its burst of euphoria, followed by a healthy dash of realism, and it could be that, for China, the process has already taken place in Shanghai and Shenzhen, where too much money was chasing too few stocks, many of which failed to measure up to the expectations of early enthusiasts.. Delayed accounts, failed forecasts, proposed rights issues, and inappropriate diversifications, have damaged investor confidence. The advisers to the China Nine will have to be stern in their advice on how Western investors expect companies to behave once they have stumped up their money. The benefits to Hongkong, apart from the fees earned, will initially be a widening of its market - although not by a massive amount. Their combined capitalisation will be no more than $30 billion, according to HG Asia's sums, which compares with a total market capitalisation of more than $1.76 trillion. Even so, the largest of the China Nine - Shanghai Petrochemical - at an expected valuation of $2.5 billion, will be among the top 30 companies quoted on the Hongkong market. One of the strongest benefits will be the enhanced reputation for expertise in the great China game that will accrue to Hongkong, even if a lot of the advisers come from elsewhere. The real bottom line is that Hongkong has the opportunity of making itself indispensable, and showing Beijing that its present system, left untouched, can be invaluable.