Shanghai becomes the fourth most competitive global financial center
September 22, 2020 Category China News Round-up, Weekly
According to the yearly Global Financial Centers Index report by Z/Yen, a commercial think tank in London, Shanghai has become the fourth most competitive financial center in the world after New York, London and Tokyo in early 2020. It ranked the 24th in 2013. Aiming to become both an international financial center and an international shipping center by 2020, Shanghai’s ranking as a financial center moved up significantly. Shanghai has a lot of potential to be a major international financial center for the same reasons why New York is, said Richard Sylla, Chairman of the Museum of American Finance. The economic foundation for a financial center is very large, said Sylla, who is also Professor Emeritus of Economics at the Leonard N. Stern School of Business at New York University. He specializes in the history of financial institutions and markets. Kevin Chen, Chief Economist of Horizon Financial, has made an even bolder assertion that Shanghai could be the most important financial center in Asia in addition to its status as a financial center in China. Shanghai should have a parallel role with New York and London in terms of global trading of financial products, asset allocation, investment banking, insurance and other business, Chen said. “I think this is beyond doubt,” he added.
Shanghai will continue to be a very important fund-raising center to support the growth of Chinese companies and it is also pivotal to the institutionalization and globalization of China’s capital market, said Eugene Qian, Chairman of UBS Securities Co. “We continue to see international financial institutions, such as asset managers, banks and insurance companies, invest in China, and a large number of those are headquartered in Shanghai. Undoubtedly, Shanghai is an important gateway to China for global investors,” Qian said. Shanghai has made very fast progress in building itself into a financial center and the successful launch of crude oil futures by the Shanghai International Energy Exchange serves as a landmark, said Chen. With balanced price levels and big trading volumes, Shanghai crude oil futures have become the third most important benchmark in the world after New York crude oil futures and Brent crude oil futures, according to Chen. China’s further liberalization of the financial market is attracting big-name international financial firms from both Europe and the United States, with Shanghai as a magnet.
JP Morgan Securities (China) Co was formally opened for business in March and JP Morgan is working to acquire more shares in the joint venture. The world’s largest hedge fund Bridgewater Associates also set up an investment management unit in Shanghai, with U.S. asset management firm Vanguard recently announcing the relocation of its regional headquarters to Shanghai. The Wall Street firms are looking for long term opportunities and that is why they are very heavily invested in China, said Chen, as reported by the Shanghai Daily.
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