London, New York, Singapore and Hong Kong have maintained their strong positions as the four leading global financial centers, according to the 20th edition of the Global Financial Centers Index (GFCI 20), noting that the four centers compete and collaborate with each other.
“As the power of global financial markets is shifting from North America and Europe to Asia, the financial centers on the Chinese mainland are rapidly rising in importance with five cities included in the GFCI top fifty,” wrote Professor Fan Gang President, China Development Institute, in his foreword in the report.
Shanghai, Shenzhen and Beijing rank as the top three financial centers on the Chinese mainland, according to the report. The three have their own merits and play a complementary role to each other.
“Shanghai, the birthplace of China’s modern finance industry, has stepped up its efforts to transform itself into a major international financial center since 2009,” says Gang.
Tremendous progress has been made by Shanghai - the value added contribution to GDP of financial services is now over 16%.
The number of financial institutions is almost 1,500, the stock trading volume ranks second in the world, the stock market capitalization ranks fourth in the world and the trading volume of spot gold is the largest in the world.
With the promising opportunities of the ‘Belt and Road’ initiative, Shanghai is now conducting such pilot projects as RMB trading and financial services internationalization.
Shenzhen: A ‘test field’
Shenzhen is now established as China’s second-largest financial market, with Shenzhen Stock Exchange, one of the two stock exchanges in China, located in the city. “The city is a ‘test field’ for China’s reform and internationalization,” says Gang.
During the past three decades of development, Shenzhen Ping An Insurance Group, China Merchants Bank, Guosen Securities, and several other local financial institutions have performed very well, and are now opening branches all over China.
Co-operation between Shenzhen and Hong Kong in financial services has now entered a new phase. Each city helps the other in establishing financial institutions, cross-border lending, cross-border financing, the RQFII system and other practices.
Beijing: A regulatory center
Beijing, as the Chinese capital, has become the financial services regulatory center of China. It is also the headquarters of the financial regulatory authorities and the Four Major National Banks - ABC, BOA, ICBC and CCB.
Finance is one of the ‘pillar’ industries in Beijing and the contribution to economic growth of financial services was 40% in 2015.
“As the headquarters of the Asian Infrastructure Investment Bank and the Silk Road Fund, Beijing is poised to increase its strength in the financial sector,” says Gang.