Q:

Price difference among shares in Hong Kong and Shang Hai

Recently, I am interested to invested in Industrial and Commercial Bank of China, which is listed both in Shang Hai and Hong Kong stock market.
Since I only can trade in Hong Kong Stock Market, I would like to know why there is a big difference among the current price and history price for a same stock in two different stock exchange?
http://www.google.com/finance?q=SHA:601398 (Shang Hai, last price is 4.04 China dollar)
http://www.google.com/finance?q=HKG%3A1398 (Hong Kong, last price is 5.93 Hong Kong dollar)
Is 1 Industrial and Commercial Bank of China share at Shang Hai stock exchange equivalent to 1 share at Hong Kong stock exchange?
If not, why there are a huge difference in their price?
4.04 China dollar = 4.7 Hong Kong dollar
5.0 China dollar  = 5.93 Hong Kong dollar
Also, their historical price look different too.
Shang Hai's is now near its lowest (Its highest is around 8)
Hong Kong's is now near its highest (Its highest is around 7)

A:

Wikipedia talks about the Chinese currency:

Scholarly studies suggest that the yuan is undervalued on the basis of purchasing power parity analysis.

so despite it appearing cheaper due to the official exchange rate, the price in China might actually be fair. There are also restrictions on foreign exchange (purportedly "to prevent inflows of hot money"), which, in concert with any other legal obstacles to owning or trading on the Chinese exchange, may also explain why the high-frequency traders aren't tripping over each other to arbitrage away the difference.

