A hoped-for expansion in the number of cross-border trading schemes with the mainland is likely to serve as the springboard for a further easing in capital controls by Beijing next year. Analysts and bankers also believe the increased capital flows resulting from wider access to the mainland stock markets will boost the prospects of the yuan becoming an international investment currency. Brett McGonegal, the chief executive of financial services firm Reorient Group, describes the tie-up between the Shanghai and Hong Kong markets under the through train stock scheme as "a huge step in opening up the capital account". "This is a very important event in practice but also extremely symbolic in the progression to a globalised currency," said McGonegal, who described last month's launch of the Stock Connect scheme as the most significant currency development since the introduction of the euro. "I think a connect scheme between Shenzhen and Hong Kong will most likely be next, followed by an extension in the reach of the Shanghai-Hong Kong link to other markets." Such schemes would attract more international players to invest in yuan products, he said, referring to a key policy goal of the central government for the internationalisation of the yuan. "At this moment, these schemes are more symbolic of the desire of the current administration to make the yuan a global currency and give the world a clearly defined, well-thought-out and safe vision into what the future will hold," McGonegal said. While many observers expect the mainland to loosen more capital controls next year by introducing more cross-border trading schemes, economists have mixed views on how far Beijing will go down the path. Keith Pogson, a senior partner of financial services for Asia-Pacific at EY, believes the reform will lead to the removal of capital controls. "We are definitely on a journey towards the removal of capital controls," Pogson said. "That would be a big leap for the Chinese government to make, and in keeping with their historic behaviour, I think we will continue to see relaxation measures taken in a balanced and measured way over time until we reach a point at which capital controls become almost meaningless." However, Xu Sitao, the chief economist of Deloitte China, believes these controls will remain, at least for a considerable time. "The mainland won't abandon capital controls in the next few years," he said. "However, policymakers have recognised the need to promote outbound investment for firms and individuals." He said that with the mainland's vast savings and relatively underdeveloped capital markets, its stock market would be unable to recycle such savings effectively and efficiently. "It would make a lot of sense for mainland individual investors to enlarge their investment universe with such schemes of mutual recognition," said Xu, referring to the likelihood of more cross-border trading schemes. Bruno Lee, the chairman of the Hong Kong Investment Funds Association, said that with the through train stock scheme under way, the fund industry loomed as the beneficiary of the next mostly likely cross-border yuan trading initiative. A long-sought mutual recognition agreement would allow fund products domiciled in Hong Kong to be sold on the mainland, while mainland fund products could be offered in Hong Kong. "I am optimistic that fund product cross-selling will happen in 2015. This would boost fund markets and increase cross-border fund flows," Lee said. "Different from the QFII schemes, which only allow big international firms with licences to invest in the mainland, the stock scheme and the mutual recognition scheme for cross-border fund products would allow the participation of all investors," he said, referring to the qualified foreign institutional investor and the renminbi qualified foreign institutional investor programmes under which quotas are granted. "This is important for Beijing to now open the door to all investors, as everyone could be allowed to trade in the share market or buy fund products. This will be a major step forward for the opening up of capital controls." Elvin Yu, the managing director and head of institutional business of greater China and Southeast Asia of Allianz, said the Hong Kong Monetary Authority's scrapping of the 20,000-yuan (HK$24,940) daily exchange cap for individuals last month would boost yuan liquidity and encourage companies to issue yuan fund products next year.