Shanghai: City develops as a global finance hub

City develops as a global finance hub
By Wang Zhenghua (China Daily)
Updated: 2006-09-02 09:01

SHANGHAI: Experts said on Friday that the city, the nation's economic powerhouse, is displaying more of the characteristics of a global financial centre as it improves its disclosure of economic information.

They said the release of a report on Shanghai's financial sector on Thursday shows that the city is adopting more of the practices of international financial centres.

The Shanghai Financial Stability Report, the first of its kind for a Chinese city, was published on Thursday by the Shanghai headquarters of the People's Bank of China.

The report will now be issued annually to enhance the stability of Shanghai's financial sector, as well as strengthen the city's ability to counter financial risks.

Experts stressed that the metropolis should strengthen the construction of a "soft environment" and build a stronger service industry as nearby cities develop their manufacturing sectors.

"The authorities released the report at this time because the financial sector will fully open at the end of this year," said Sun Lijian, an analyst at Fudan University's School of Economics.

China is taking step in order to fulfil its commitments to the World Trade Organization (WTO).

"Following the examples of other world financial hubs such as London and Tokyo, Shanghai is enhancing its information disclosure as its role escalates," he said.

"For Shanghai, which plays such an important role in attracting global funds, achieving information transparency is the basic task which can help build confidence in the emerging market."

Tan Ruyong, an analyst at the Research Centre for Modern Finance of Shanghai University of Finance and Economics, said that the stability and security of financial markets are significant issues as China is due to complete its interim period as a WTO member.
Composed of six parts including an overall evaluation of the city's financial stability, upcoming challenges, and the influence of economic activity on financial stability, the report offers a comprehensive analysis of the city's micro economy and the performance of its financial sector.

According to the report, financial transactions in the city grew to 35 trillion yuan (US$4.38 trillion) by the end of last year, with the turnover of securities accounting for 5 trillion yuan (US$625 billion) 79 per cent of the national total.

The trade volume of futures accounted for almost half of the national total, which stands at 6.5 trillion yuan (US$812.5 billion). Meanwhile, trade volumes on the inter-bank, gold and foreign exchange markets also increased.>