The Hong Kong bourse chief said on Tuesday that linking the Shanghai and Hong Kong stock markets will boost the offshore usage of the yuan.

"The connection is a milestone in opening up China's financial markets. It will attract a broader international and institutional investor base to China and enable Chinese investors to diversify their portfolios," said Charles Li Xiaojia, chief executive of Hong Kong Exchanges and Clearing Ltd.

Earlier this month, the China Securities Regulatory Commission said it would begin a pilot program for cross-market stock trades for mainland and Hong Kong investors in an effort to liberalize capital flows.