# Shanghai: Becoming the world's Third Financial Center



## ChinaboyUSA (May 10, 2005)

Just read an article online, the point is when will Shanghai become the world's third financial center? What the effect will be to the world financial field? And what does Shanghai need to improve crutially to match the title?

http://en.ec.com.cn/pubnews/2005_11_11/202586/1116765.jsp

An official with the City of London said on Nov. 9 that its newly released ranking report on financial hubs around the world indicated Shanghai would hopefully become the third global financial center following London and New York.

This is reported by the International Finance News today. 

The survey result announced by the City of London on Nov.8 also shows that London and New York have successfully strengthen its leading position over Frankfurt and Paris compared with the ranking in 2003 on the basis of the indicators evaluated by 400 experts. 

Nobody responding to the survey thinks London or New York will face the risk of losing their ground as the world financial hubs in the next 10 years. However, the report has also pointed out that historical factors underlie and underpin the strength of the two cities so there is no reason for complacence as emerging imminent challenges are likely on the horizon. 

Most interviewees believe that Shanghai would probably become the third global financial center in the coming years as China's economic power is growing day by day. It is widely thought that Tokyo has hardly any chance of restoring its significance as it enjoyed before due to its bureaucracy and weak supervision. 

By People's Daily Online


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## pottebaum (Sep 11, 2004)

I suppose they're speaking in terms of # of employees in the financial sector? I suppose Shanghia has the potential, but I think it'll be overshadowed by Hong Kong in the short term.


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## silly thing (Aug 9, 2004)

do u know y big companies in china go to hk stock market rather than shanghai?


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## George W. Bush (Mar 18, 2005)

In the long term maybe. For now Hong Kong has much more clout. Shenzhen and Seoul also have ambitions to serve NE Asia. And there are the well established giants Tokyo and Singapore.


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## Monkey (Oct 1, 2002)

Actually Shanghai has lost ground. Even mainland Chinese companies eventually lost faith in the corruption and government interference in Shanghai and listed in Hong Kong instead where there are transparent laws, consistent regulation, and a much more experienced pool of skilled labour. Shanghai has buult the physical infrastructure, the "hardware" if you will, of a world classs financial centre, but it still needs to work on the software.


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## hkskyline (Sep 13, 2002)

Until China loosens its capital controls, foreign *financial services* companies are not likely to set up a major regional operation in Shanghai, since they need a steady stream of capital flowing in and out of their offices.


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## SHiRO (Feb 7, 2003)

Not with Tokyo, Hong Kong and Singapore around...


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## wjfox (Nov 1, 2002)

^ Exactly what I thought...


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## ChinaboyUSA (May 10, 2005)

The article is based on the survey by finace professionals in London and NYC.


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## SHiRO (Feb 7, 2003)

No proof for that though...


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## ChinaboyUSA (May 10, 2005)

*This is reported by the International Finance News today.*

IMO, I don't think that the International Financial News will do a fake survey?
If you don't believe, then do a survey by yourself by going to London and NYC.


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## Effer (Jun 9, 2005)

SHiRO said:


> Not with Tokyo, Hong Kong and Singapore around...


So true...


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## paidos (Jul 27, 2005)

ChinaboyUSA said:


> The article is based on the survey by finace professionals in London and NYC.


I wonder how many of those so called finance professionals have actually worked or at least spent considerable amount of time in every city in the survey, to know well enough about the actual law practiced in real life, business environment, corruption and efficiency. Getting the facts of a city from different sources is one thing, doing business in that city is another thing. China is definitely catching up, but can the Chinese government foresee exactly what China can/will achieve? how their cities end up to be? Within China, no one even knows which city will be the financial centre of the country, Beijing or Shanghai. A city won't become the world's 3rd financial centre just because a group of people feel or believe that way, unless they know something about the Chinese cities which the Chinese government doesnt.


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## ChinaboyUSA (May 10, 2005)

Well, there's a long way ahead for Shanghai to overtake Hong Kong and Tokyo.
But let's make things like this: Big companies go to Hong Kong for IPO, but they all generated the domestic fund through Shanghai Stock Exchange or Shenzhen, Shanghai is China's financial hub - this is not disputable, Hong Kong is more to Asia and international financial market. Tokyo is clearly a more domestic one resemble to Shanghai. But let's see, based on the size of mainland China's market, Shanghai matches the title, Hong Kong today and future plays and will play more as a hub to interact with mainland market to the world.....more as a bridge's role, while Shanghai is generating both domestic and international investment as its key location.

I believe that in the coming future, 
it will be a financial triangle in East Asia with a setting as Tokyo-Hong Kong-Shanghai to match a traditional
New York - London - Paris finacial setting and more interact with them to affect the world's business.

Shanghai will play a leading role for the 3 of them to interact with New York and London. (for now, Hong Kong plays more, while Tokyo is more domestic)
This is not only based on the market size and how big the Stock exchange is or will be, but consider the cultural issues and all the aspects.
Shanghai does get the big thumb.
Its location,lower-cost labours and expenses, much bigger surrounding industry zones together with Jiangsu and Zhejiang province, (make sure there's no customs formalities for people to visit Shanghai domestically but Hong Kong) highly educated professionals and highly skilled workers. Shanghai's talents' resource is super big.....all these offer a greater Shanghai!

Hong Kong and Shanghai is playing different roles, and they will cooperate more then competition,it is very important for these two to have more connections with each other than arguing who's better. And for Tokyo, Shanghai is based on a bigger domestic market as I mentioned above, and a very important advantage is from last century's 1920s to 1930s, these cultural factors do affect investors and professionals choices. 

Comprehensively, Shanghai possesses the qualities and quantities to be the real financial center matches Londond and New York, but there's still a long way to go, especially the system operation. A political reform is necessary but it is a very complicated issue for China, dealing the relations with Beijing is a big thing for Shanghai, system's formation is not a one night matter, it needs not only the government effort but also the massive population's quality improvement. 
All the best, Shanghai.


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## pottebaum (Sep 11, 2004)

Don't many Chinese companies set their IPO's up in New York nowadays?


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## ChinaboyUSA (May 10, 2005)

^ They do, and we can expect more in the future, while domestic IPO is mostly in Shanghai.
Without the strong domestic IPO support, it is hard to get the international investors. 

There's A share and B share in Shanghai Stock Exchange, B share is for foreign investment, but NYSE is more matured to conduct the international IPO so far!


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## pottebaum (Sep 11, 2004)

Ah, okay.


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## scorpion (Sep 14, 2002)

with all the hype of Shanghai, what's gone somewhat unnoticed in the world hype-machine is the HK-afterburner story of 2005...

how HK, seemingly in its own built-fecal matter of an ex-colony-hasbeen, "rebuilt" from island-status to PENINSULAR-status in a year's time, and is now clocking in 8% growth rates, which is insane for an economy that developed~~~

as HK further integrates into the mainland in these next handful of years, i only see this trend continuing really--now that HK has further cemeted its global financial status, is it really going to let it go that much easier down the road??? of course, shanghai is on the rise as the mainland's tide swells these next decades, but that also includes HK as already seen this year in its surprisingly robust growth/development, with only its own global aspirations to follow (in due-time)...


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## samsonyuen (Sep 23, 2003)

^Yeah, it's a big success story, not that HK was ever doing poorly or anything though. Shanghai won't be the hub it wants to be for a long time coming, I reckon.


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## polako (Apr 7, 2005)

How many Financial Service jobs does the Shanghai area have right now?


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## spyguy (Apr 16, 2005)

SHiRO said:


> Not with Tokyo, Hong Kong and Singapore around...


And then competition from a rising Mumbai.


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## ChinaboyUSA (May 10, 2005)

polako said:


> How many Financial Service jobs does the Shanghai area have right now?


Are there a clear statistics about financial professionals in New York, London or Hong Kong?


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## hkskyline (Sep 13, 2002)

pottebaum said:


> Don't many Chinese companies set their IPO's up in New York nowadays?


Not anymore. The Sarbanes-Oxley legislation is causing a lot of headaches for mainland companies seeking to raise funds in the US - NYSE and Nasdaq. The preferred market to IPO is now Hong Kong, although London and New York are certainly trying hard to woo companies.


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## ChinaboyUSA (May 10, 2005)

More than 90% of the IPO funds raised in Greater China is from Hong Kong Stock Exchange (HKSE) and Shanghai Stock Exchange (SSE). Statistics based on the Year of 2001 to 2003-Pricewaterhouse Surveys.
Recently we heard successful Chinese companies' IPO in Nasdaq, like Baidu. It was this year.

hkskyline: Is that true that The Sarbane-Oxley legislation is trying to set obstalces for the firms from mainland China IPO in New York?
If that's true, it won't be a right policy for both sides.


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## silly thing (Aug 9, 2004)

Baidu is ....soooo crazy....the PE ratio is too high.... 3000? it seems not that gd for its prospect....


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## odegaard (Jul 27, 2004)

There's more to being a financial center then just having tall pretty skyscrapers. A sense of "transparency" is also a must. For the next foreseeable future this will be China's weak point. The government has a reputation for a lack of honesty. Take a look at how they handled the SARS case. Would you put your money in a place that has a habit of covering up their sh!t?

Another example is the Liu Qibing case....it's a story of a financial trade that has gone really sour but the story reads more like spy novel rather then a financial news editorial. Basically some trader (Liu Qibing) made a really bad trade in the copper commodity futures market. He made a bet that the price of copper would go down but instead it has gone up. We're talking about a potential $1 billion loss here. When first confronted with the case, Chinese authorities denied that the person actually existed! 

I sincerely doubt Shanghai will be becoming a financial center anytime soon.


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## pottebaum (Sep 11, 2004)

hkskyline said:


> Not anymore. The Sarbanes-Oxley legislation is causing a lot of headaches for mainland companies seeking to raise funds in the US - NYSE and Nasdaq. The preferred market to IPO is now Hong Kong, although London and New York are certainly trying hard to woo companies.


Although it has sort of reversd itself over the last year or so; Chinese IPOs have become pretty big business over here, and the Sarbanes-Oxley legislation has gained itself quite a few critics. Either way, though, it's been a boost to Hong Kong; whether or not New York is the primary provider or foreign capital.


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## polako (Apr 7, 2005)

ChinaboyUSA said:


> Are there a clear statistics about financial professionals in New York, London or Hong Kong?


Yes, in the US the government provides all kinds of economic data, through a website which is updated monthly:www.bls.gov

For example the NYC Metro has 787K Financial Service jobs as of November 2005.


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## hkskyline (Sep 13, 2002)

The Sarbanes-Oxley Act is not aimed directly at Chinese companies listing abroad. Rather, it was a reaction to the Enron disaster to boost corporate governance so investors can regain confidence in the markets. However, it has resulted in a lot more accounting work for all public companies - American or foreign. As long as the company floats on the NYSE or Nasdaq, they must follow the Act. Many foreign companies are balking at listing in the United States because of the added costs of regulatory compliance.


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## ChinaboyUSA (May 10, 2005)

I agree with the equal actions.
It is a very sensative issue to get politics invloved in the business. Policy makers' responsibility is to smoothen the business cooperation instead of setting obstacles to it through authorities if the business is based on a mutual profits.


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## Rational Plan (Mar 15, 2004)

You can download the report and it analysis is not so clear cut as has been suggested. The survey did interview many people who run major financial concerns in the cities of London, New York, Paris and Frankfurt. When looking to the future it was seen as inevitable that major financial flows from China would need to be serviced in the region. 

Tokyo was once considerd the primary centre at the end of the eighties but incompetent government regulation is seen by many respondants as the main reason for Tokyo losing out to Hong Kong and Singapore. 

There are many factors influencing the location of a major financial centre. The largest centres are attractive to employers because of large and deep pools of specialised workers. The next most important is the strength and reliabilty of the law and regulator. As long as the law is seen as fair and balanced and the regulator is up to the job of regulating complicated financial instruments then financial companies have confidence in doing business there. 

The report was looking twenty years plus into the future and it idenitfied two possible models for China:
If China develops reliable courts independent from the Government, free media where government statisics are reliable, and analysis of government data is permissble (remember that Hong Kong journalist prosecuted as a spy for publishing unreleased government stats). Then the 'onshore' model of a major financial centre would develop and the most obvious centre would be Shanghai (Similar to New York in its role for its domestic market). 

If the necessary conditions did not occur in China then most people will funnel there money out of the country to an 'offshore' centre. Simialar how London acts as a centre for Europe. The most likely centres are Hong Kong or Singapore, but some felt if things did not improve in China as regards to the rule of law then maybe Hong Kong would not be far enough offshore. So Singapore could develop as Asia primary centre. In the reportit was praised by many correspondants for its sophisticated regulation and good legal system.


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## YangtzeSea (Jan 8, 2005)

Still a long way to go. Is 20 or 30 years enough to make changes?


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## ChinaboyUSA (May 10, 2005)

It is crutial to have a more transparent media system, and we can see that it's been a big progress since the reformation. Political reformation is a tough procession and very different from the economic one. I am not so sure if S'pore mode is good for China (since China is much much bigger than S'pore), but consider all the cultural factors, it is a good mode. Midia freedom is relative, I think that the most important is the government and its people can get a mutual understanding to keep the life standard growing.

(to be continued)


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## paidos (Jul 27, 2005)

YangtzeSea said:


> Still a long way to go. Is 20 or 30 years enough to make changes?


It depends on whether Shanghai can narrow the gap in 20 years, or make enough changes in the next 20 years to create a suitable environment for a global financial centre and start from there. Hong Kong is an important Asian financial centre and if it manages to develop the Chinese market for 20 years, it will only be even stronger. Shanghai will never become China's premier stock market if the best companies continue to be listed in Hong Kong. It simply does not have another 20 years to lose. It's not like others will wait for Shanghai and give their market shares out once Shanghai is ready. 
Things are not looking too good at this stage. Shanghai's stock market has slumped to 8-year lows and has stayed there since then. The financial sector to total GDP ratio has been declining for a few years, despite the fact that China's financial market size is now bigger than ever. Before it aims to be the world's 3rd financial centre, it's a better idea to first cement its position as the financial centre of China and then the top Asian financial centre .


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## ChinaboyUSA (May 10, 2005)

When you talk about the stock market in China, you need to get a basic knowledge it is in China, there are some specific issues need to make clear about. Shanghai's stock exchanges 8 year lows is not a simple market reflection. State owned enterprises in China is a big burden and on the opposite side, the private owned business is springing up, but who is the controller of the stock market? Let's expect the government can do something positive to the stock market.


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## kamloon (Aug 8, 2004)

i recommend you guys read the latest izzue of "Asiaweek", it reports fully what the problem shanghai stock market is suffering now


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## kamloon (Aug 8, 2004)

ChinaboyUSA said:


> When you talk about the stock market in China, you need to get a basic knowledge it is in China, there are some specific issues need to make clear about. Shanghai's stock exchanges 8 year lows is not a simple market reflection. State owned enterprises in China is a big burden and on the opposite side, the private owned business is springing up, but who is the controller of the stock market? Let's expect the government can do something positive to the stock market.


yes, then you have to ask why those low profitability State owned enterprises can be listed in the shanghai stock market? and why there is so many black hands behind the market to control the whole market secretly? what's going on actually?

it won't happen in hong kong


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## ChinaboyUSA (May 10, 2005)

Not all the state owned enterprises are in low profits.
Those low ones that listed on the stock list are for the purpose to clear the debts and fund a welfare system when they were under a planning economy system. 
It is just like that you were in a supportive life by your parents and have nothing to worry but suddenly one day you need to support yourself by making money, but you are not mature enough to face all the risks and it takes time of you to become self-supportive and distinguish the risks.....it is a normal reflection and a question of time.
Since the stock market in China is not mature enough, government, let's say the parents here have the responsibility to lead the child into a mature stage.


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## bustero (Dec 20, 2004)

I think it's reasonable to believe that shanghai will be larger than HK money center wise in 20 years time , which isn't really that far away, 20years is a very short time frame from history's point of view. You can actually see it even now, every single money center bank, IH, etc have put up set up their operations as an option to when this is going to happen. 

One must remember it wasn't too long ago (within Hank Greenbergs lifetime!) that it was Shanghai which was the hq office and hong kong the backwater for most businesses including finance. With china growing just do the numbers of where it's economy will be in 20 years and take the relevant financial services chunk out of that you'll realize how sizable it is. It does not need to be Asia's hub to be the largest in Asia due to the size of it's domestic market. 

Both HK and Shanghai's destiny is controlled in Beijing and between the two, it's quite clear which city the powers that be have designed to be it's champion. This doesn't mean that HK will fade away but most chinese will naturally tend to gravitate to Shanghai and not HK as they have traditionally done.


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## silly thing (Aug 9, 2004)

bustero said:


> I think it's reasonable to believe that shanghai will be larger than HK money center wise in 20 years time , which isn't really that far away, 20years is a very short time frame from history's point of view. You can actually see it even now, every single money center bank, IH, etc have put up set up their operations as an option to when this is going to happen.
> 
> One must remember it wasn't too long ago (within Hank Greenbergs lifetime!) that it was Shanghai which was the hq office and hong kong the backwater for most businesses including finance. With china growing just do the numbers of where it's economy will be in 20 years and take the relevant financial services chunk out of that you'll realize how sizable it is. It does not need to be Asia's hub to be the largest in Asia due to the size of it's domestic market.
> 
> Both HK and Shanghai's destiny is controlled in Beijing and between the two, it's quite clear which city the powers that be have designed to be it's champion. This doesn't mean that HK will fade away but most chinese will naturally tend to gravitate to Shanghai and not HK as they have traditionally done.


based on wt?
base on the fact?
the fact is that more more huge companies going to hk stock mkt rather than shanghai

once hk getting bigger and bigger , u think that those companies will wait sH to establish well in its system and go back to SH? 

do u know y the world biggest usd trading center is not in new york but london?


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## bustero (Dec 20, 2004)

Well yes I am very familiar with the Financial Services Industry in general as I work in it and most of my opinion is based on my experience and from what I know the plans of the Money Center Banks, Insurance companies et al. 

Everything written on this thread is speculation we can only judge based on exsiting information and experience where to take our companies and plan for the future. Surely anyone can make a case of how Shanghai will NOT be bigger than HK and it would even be reasonable. Many things would happen for it any of these predictions to take place. Even HK staying the way it is regardless of what shangai does is premised on a number of assumptions, some of which are based on highly political decisions in beijing. 

My opinion is from what I know from within the industry and their own opinions all highly speculative as is everyone elses here BUT I do know their putting their money where their mouth is which is quite different from just reading posts and internet reports.


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## Rail Claimore (Sep 11, 2002)

Rational Plan said:


> You can download the report and it analysis is not so clear cut as has been suggested. The survey did interview many people who run major financial concerns in the cities of London, New York, Paris and Frankfurt. When looking to the future it was seen as inevitable that major financial flows from China would need to be serviced in the region.
> 
> Tokyo was once considerd the primary centre at the end of the eighties but incompetent government regulation is seen by many respondants as the main reason for Tokyo losing out to Hong Kong and Singapore.
> 
> ...


If China goes down the path of democratization that we hope it will, then I can see Hong Kong holding out in the long term. However, I would not write off Tokyo just yet. Japan is in the midst of economic transition under Koizumi. I suspect he envisions Japan as a financial services center that's akin to Britain in the Asia-Pacific Region. Given the current pace of reform since he's been in office, and his recent election mandate over privatization of the postal system (which is basically Japan's largest bank), it might happen in the next 10 or 15 years.


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## mopc (Jan 31, 2005)

Shanghai will indeed be 3rd - 5th within 10, 15 years. Now it´s too early.


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## ChinaboyUSA (May 10, 2005)

UPDATED: 08:55, May 17, 2005 (People's daily online)

*Shanghai's prospect to reemerge as a World City: WB vice president* 

Although it has reemerged as China 's economic powerhouse, Shanghai still has many drawbacks compared with New York, London, Paris, and other widely-acknowledged world cities, said Zhang Shengman, vice president of the World Bank (WB), on the Shanghai Forum held Monday. 

Having already become China's economic engine after its efforts in the past two decades, Shanghai is undoubtedly eager to step into the world city parade, and the municipality has already made certain arrangements for the goal in its tenth five-year plan. 

Shanghai got an "A plus" among the 23 Chinese cities in a recent survey on investment environments by the World Bank. More than 300 of the world's top 500 enterprises have made investments in Shanghai. 

Another the survey shows that Shanghai is at the 13th position in World City ranking list, a similar position to that of Rome, but still lagging behind cities like San Francisco. 

Shanghai has gained its position in the world due to the policies of the central government, historical and geographic elements, noted Zhang, adding that Shanghai still needs to try its best to create a grand market, world-class service sectors and nurture the culture of innovation. 

Despite unique features possessed by different world cities, at least three characteristics are being shared by world cities, which include deep influence as economic hubs on neighboring cities, highly-concentrated service sectors, and enhanced governance to ensure an enabling environment. 

*Zhang stressed that the world city should have its own soul and allure talent, provide high-quality life for them, and keep up self-improvement. * 
He suggests that Shanghai, a city with 30 percent of its GDP from the manufacturing industry, cannot rely only on industrial development, but needs more information and knowledge instilled, talent from around the world and also to leave more room for developing culture and maintaining tradition. 

Zhang held that Shanghai's potential to become a world city is closely linked to the rise of the Yangtze River Delta economic zone. "If a smoothly-run rail system can be set up, a huge market with 600 million population will emerge in the Yangtze River Delta region," said Zhang, adding that with a 65 percent urbanization degree, Shanghai is helping its neighboring cities' development, and thus is spurring the development of the whole region. 

Cautious but still optimistic, Zhang said that if China's economy can maintain speedy growth, and Shanghai can gain an open and creative spirit in its competitiveness, Shanghai will surely become China's first world city. 

Source: Xinhua


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## ChinaboyUSA (May 10, 2005)

Times Magazine: Photo Essay: Shanghai: The New World Capital:

http://www.time.com/time/asia/photoessays/shanghai/index.html


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## ChinaboyUSA (May 10, 2005)

City aims to become the renminbi forex and derivatives center of East Asia 
--------------------------------------------------------------------------------
9/12/2005 16:25 


Wendy Zhang/ Shanghai Daily news

Shanghai is expected to become the renminbe trade center in the East Asia region by 2010, marking an important step in the city's transformation into a global financial center, according to the Shanghai Financial Services Office.
Many countries and cities plan to establish, or have already established, their own globally-significant financial centers, but the renmimbi business will be unique to Shanghai, said Dr. Yin Jianfeng, a researcher with the financial research institute of the Chinese Academy of Social Sciences. 
The building of Shanghai into a global financial center is a strategic national objective which has been driven by various preferential policies this year, including the establishment of the People's Bank of China's headquarters in the city.


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## Vapour (Jul 31, 2002)

Somebody tell me what the heck is a "global financial center":

-Just a big stock exchange?
-That + large banks + large insurance companies + large securities c. + other financial c. ?

If so, I don't see Shanghai becoming #1 in Asia anytime soon.


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## PhillyPhilly90 (Aug 12, 2005)

Isn't Hong Kong booming in construction too?? What about economically??


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## ChinaboyUSA (May 10, 2005)

Friday December 9, 08:02 PM 

*Shanghai Plans To Build RMB Products Center*

SHANGHAI, Dec 9 Asia Pulse - Shanghai will open a RMB products center in East Asia by 2010, said Ma Hong, deputy director of Shanghai Financial Service Office.

Fueled by the approval of the comprehensive reform plan by the State Council and the establishment of the Shanghai headquarters of the Peoples Bank of China, Shanghai has prioritized the target of making the city an international financial center since the beginning of this year.

Feng Guoqing, executive vice mayor in charge of finance, said that Shanghai will spend five years laying the foundation, ten years to shape up the center and 20 years to make center complete, adding that by 2010, Shanghai will become a RMB financial products innovative and trading center.

(XIC)


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## ChinaboyUSA (May 10, 2005)

IN BRIEF (Page: 10, Date: 12/08/2005)

2005-12-08 06:06



BEIJING

Financial confidence

Chinese bankers' confidence for economic growth and the industry's financial health reached a record high in the fourth quarter, according to the central bank.

The "Bankers Confidence Index" climbed to 78.4 in the fourth quarter, the People's Bank of China said in a report based on a survey of 2,800 heads of financial institutions. That compares with a low of 41 in the second quarter last year.

Oil contract

China National Offshore Oil Corp (CNOOC) has singed a production-sharing contract with US-based Devon Energy Corporation to develop a deep-water oil block in the eastern part of the South China Sea. 

The block covers a total area of 6,939 square kilometres and is 300 to 2000 metres deep. Under the terms of the contract, Devon will be responsible for all the expenditures incurred during the exploration period. CNOOC has a 51 per cent share interest in any commercial discovery in the block.

KPMG recruitment

KPMG recently started its recruitment programme for the year 2006. The company plans to recruit 750 graduates in the Chinese mainland and 250 graduates in Hong Kong SAR.

Ian O'Brien, human resource director of KPMG China said the company already has 4,200 employees across the country in its six offices. A new office is due to open in Hangzhou this month.

Pearl designs

French-based pearl jewellery giant Lilyrose Pearls will launch its 12 winter designs on Thursday at its flagship store in Beijing.

Lilyrose Pearls is one of the world's leading pearl producers and designers. It opened Asia's largest pearl store in Beijing this February.

Mainland accountants

Hong Kong Institute of Certified Public Accountants (HKICPA) is to develop more members in the Chinese mainland with the launch of the Certificated Public Accountant (CPA) Qualification Programme (QP) in Beijing in co-operation with the National Accounting Institute today.

The programme consists of four modules. The first workshop will start in February 2006 with around 50 members mainly from professional accounting firms. 

Industry fair

The first Fujian Petroleum & Chemical Industry Fair and Cross-Straits Petrochemical Industry Development Forum will be held on December 28 and 29 at Quangang, Quanzhou in Fujian Province. 

The fair will feature 300 international standard exhibition stands, divided into sections for Taiwan products, petrochemical raw materials, machinery products, science and technology and industrial. 

Fruit contest

The first China Brand Name Fruit Contest kicked off on Tuesday. The tangerine from Deqing of Guangdong will face challenges from other fruit brands across the country. 

The one-month event aims to help enhance the competitiveness of Chinese fruits and create more famous branded fruits in the country. Those wanting to enter the competition can send their sample products to the fruit and nursery stock quality supervision and examination test centre of the Ministry of Agriculture before December 25. The winner will be announced on January 6.

SHANGHAI

Christmas E-shopping

EBay Eachnet, the Chinese arm of the US online auction giant, yesterday started its four-week-long Christmas international shopping season, which allows Chinese consumers to buy popular products through eBay's websites in regions including Germany, South Korea, the Netherlands, and Hong Kong.


(China Daily 12/08/2005 page10)


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## samsonyuen (Sep 23, 2003)

Here's an interesting article on the development of the Yanghan Deep Water Container port, to help Shanghai become even more popular in container facilities against Hong Kong, Busan and Singapore.
_______________________________________
A New Port in Shanghai, 20 Miles Out to Sea 
By DAVID BARBOZA
Published: December 12, 2005
SHANGHAI, Dec. 11 - China has opened the first phase of what could eventually become the world's largest container shipping port, a deepwater facility on an island about 20 miles out to sea.

The Yangshan Deep Water port is this city's effort to keep up with the explosive growth of exports in the Yangtze River Delta region, which has grown into a strong rival to China's long-dominant Pearl River Delta area.

Some experts say the new port could eventually help Shanghai overtake Hong Kong as the world's biggest container shipping port, while also posing new challenges to Singapore and Busan, South Korea, two of Asia's leading trans-shipment hubs.

"This is a major development," said Wu Wenhua, a researcher at the Institute of Comprehensive Transportation in Beijing. "This port will help make Shanghai a major shipping and financial center. They didn't have a deepwater port, so this was a major breakthrough for them."

Other experts say the city of Shanghai might have to spend up to $18 billion over the next 15 years to complete the construction of this complex port, which will be able to accommodate much bigger cargo ships and by 2020 could handle alone as many as 20 million 20-foot-equivalent containers.

The Yangshan Deep Water port is another one of China's large infrastructure projects, which are meant to ensure that the country's soaring economic growth does not stall because of energy shortages, transportation bottlenecks or land and labor restrictions.

And few cities in China are as ambitious as Shanghai, which is building skyscrapers, superhighways and bullet trains, as well as leveling entire districts and relocating tens of thousands of people to prepare itself for the 2010 World Expo.

Shanghai now operates the world's third-busiest container shipping port behind Hong Kong and Singapore, which each handled just over 20 million 20-foot-equivalent unit containers last year. 

Shanghai's ports handled nearly 15 million of the containers last year, up from about 6 million in 2001, even though this city lacked a deepwater port that would have allowed bigger ships to dock.

Its existing ports along the Yangtze and Huangpu Rivers are about 23 feet deep. And they are prone to silting and other problems that have helped create transportation and export bottlenecks.

But on Saturday, Shanghai opened the first five berths of the Yangshan Deep Water port, which can handle as many as three million 20-foot containers.

The port, which sits amid a cluster of islands far out in the East China Sea, is 49 feet deep.

To get cargo to and from the Yangshan Deep Water port, the government built a six-lane bridge 20 miles long - one of the world's longest bridges - to connect the coastal region of Shanghai to a pair of islands that belong to nearby Zhejiang Province.

The bridge took two and half years to build with 6,000 full-time workers. It will soon be tested by armies of cargo truck drivers who may sometimes have to navigate fog and high winds to reach the Yangshan Islands to unload.

The coastal city of Ningbo, also near the new Yangshan port, has also been growing fast. And officials in Ningbo, a city in Zhejiang Province, pushed to make their city the site of the biggest port in the Yangtze River Delta region.

But Shanghai officials were able to persuade Zhejiang officials to allow them to virtually annex a cluster of islands and stretch a bridge from Shanghai into their territory, helping Shanghai retain its regional dominance.

At a news conference here Saturday, Shanghai officials said the city government financed the project, but now some of the world's biggest cargo port operators are negotiating with Shanghai officials for a role.

By 2020, if necessary, the islands could have as many as 50 berths.

But some experts here say that building the Yangshan port is as much about prestige as money.

Shanghai seems determined to be a financial and trading capital. And without a new deepwater port, it could have faced losing out to rival ports in the nearby coastal city of Ningbo or other areas of China and Asia.

"This speeds up the process of positioning Shanghai as an international shipping center in northeast Asia," said Yang Xiong, deputy mayor of Shanghai.


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## Shawn (Nov 12, 2002)

Two problems: 1. on the microeconomic level, China suffers greatly from a lack of entrepreneurs; 2. massive amounts of nonperforming loans.

First, while the PRC has been very bold with external reforms, it has also imposed substantial and harsh legal and regulatory constraints on indigenous private firms. Seriously, only four years ago, domestic companies were finally granted the same constitutional protections that foreign businesses have enjoyed since the early 1980s. As late as 1999, banking, telecom, highway and railroads . . . all off limited to domestic firms. This was designed to prevent private domestic companies from competing with the Chinese state-owned enterprises (SOEs). The government has ferociously protected the SOEs from competition while basically ensuring that Chinese entrepreneurs fail. Thus, while the economy as a whole has boomed, we do not see any significant domestic firms challenging international powerhouses. Many private domestic firms tried to get around legal restraints by registering as partial SOEs, only to see their companies liquidated by the state upon reaching a healthy profit. Foreign investors have been the biggest beneficiaries of these constraints placed on domestic firms: in 1992, the income accruing to foreign investors with equity stake in Chinese firms was only $5.2 billion; as of 2004, it totals more than $22 billion. With dim chances for private domestic firms of competing successfully with lumbering SOEs, Shanghai will not likely see a thriving stock market: too few IPOs. Additionally, many stocks listed are non-tradable, owned by the state itself or SOEs that cannot be sold without government approval. It’s widely claimed that China’s markets have a total capitalization in excess of $400 billion, but once you factor out the non-tradable shares, the actual value is reduced to a mere $150 billion.

As a side note, this is why a number of prominent economists (such as MIT's Yasheng Huang) expect India to overtake China in the relatively near future, as the Indian economic model actively promotes domestic firms, some of which (Infosys, Ranbaxy) are among the world's leaders in their respective markets. Prof. Huang wrote a pretty famous article entitled, “Can India Overtake China?” in the journal _Foreign Policy_ (August 2003), from which I am gleaning a decent amount of this information.

Secondly, in the early 1990s when China was registering double-digit growth rates, Beijing invested hugely in SOEs, most of which were not commercially viable, leaving the banking sector with a truly staggering amount of nonperforming loans – possibly totaling as much as *50% of China’s entire bank assets* At some point, the capitalization costs of these loans _must_ be absorbed, either through write-downs (forcing the depositors to bear the cost) or through recapitalization by the government, which necessarily will come from taxes or by diverting funds from other, more attractive options (further infrastructure upgrades, for example). This will greatly hamper any attempts by Shanghai to elevate itself into a fully transparent, functional international financial center.


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## samsonyuen (Sep 23, 2003)

^Interesting post, Shawn. The scale of both economies alone isn't enough to dictate how well they do, I guess. Plus, India is poised to overtake China in population in forty or so years.


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## ChinaboyUSA (May 10, 2005)

*China sets up fund to protect stock investors*
(Reuters)
Updated: 2005-09-29 09:09

SHANGHAI - China has launched a stock rescue fund, which will focus on compensating investors and helping brokerages that run into problems, one of a raft of measures designed to buoy the nation's sickly stock markets. 

Money for the fund will come from a small portion of stock trading commissions from the Shanghai and Shenzhen stock exchanges, as well as brokerages, according to rules governing the use of the fund published in official newspapers on Thursday. 
Regulators set up a company to manage the fund in early September, overseen by five government agencies, including the China Securities Regulatory Commission, the Ministry of Finance and the People's Bank of China. 

"The launch of the fund will allow us to quickly compensate investors, in particular small investors, when brokerages face closure or bankruptcy," an official from the company said in a statement. 

The rules did not say the fund could be used to rescue the stock market, but they did say the money could be used "in other ways approved by the State Council" -- China's cabinet. 

Analysts have reckoned the fund could amass up to 50 billion yuan ($6.2 billion) -- 1.5 percent of the market's $430 billion capitalisation -- by the end of the year. 

But Beijing has never given details on the size of the fund, unveiled earlier this year and called the Fund to Protect Securities Investors. 

China's key stock index has fallen 11 percent so far this year and is hovering at multi-year lows, hit by factors such as Beijing's economic cooling steps. It dived 15 percent in 2004 to become the world's worst performer among major stock markets. 

That has hammered the country's struggling brokerages. Beijing is now consolidating the country's loss-making securities broking industry, which is crowded with more than 100 players. 

Beijing has shut or ordered the takeover of 20 brokerages since 2004, including fifth-largest China Southern Securities, but is in the process of bailing out better-performing ones, such as Guotai Junan Securities and Shenyin & Wanguo Securities. 

The government has often stepped in to cover obligations when securities houses fail. It fears a social backlash from angry investors and wants to preserve the shaky stock market as a source of company funding. 

Brokerage failures have hammered a long list of companies, from biggest domestic insurer China Life Insurance Co. and largest domestic carrier China Southern Airlines to top car maker Shanghai Automotive Co. -- all of which lost money or were forced to make heavy provisions when brokers failed.


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## Manila-X (Jul 28, 2005)

Shanghai becoming no.3? I has to beat HK before it reaches that!


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## 909 (Oct 22, 2003)

WANCH said:


> Shanghai becoming no.3? I has to beat HK before it reaches that!


And one of the big three, NY, Tokyo or London. No, Shanghai has still a long way to go...


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## ChinaboyUSA (May 10, 2005)

SSE to release new listing, trading rules
(CRI)
Updated: 2005-12-02 16:04

The Shanghai Stock Exchange will amend its listing and trading rules to fit in with the newly promulgated Securities Law and Company Law, China Business News reported. 

"So far The Shanghai Stock Exchang e and Shenzhen Stock Exchange have completed the process of amending their listing rules. The revision of trading rules is under way," the report said, quoting Zhou Qinye, deputy general manager of Shanghai Stock Exchange. 

Zhou also indicated that the revision aimed at standardizing listed companies' disclosure of required information to facilitate their development in line with the new rules. 

These are the most authoritative comments on the widely expected new rules to date, the report added. 

Zhou also said, "apart from the listing and trading rules, the Shanghai Stock Exchange will release board of directors and board of commissioners procedural rules for listed companies. Early this year The Exchange published draft guidelines for listed companies' internal control systems in order to solicit public advice. The official guidelines will be announced soon." 

"The focus is on two tasks. One is to push forward the share restructuring. The other is to intensify efforts to examine embezzlement by substantial shareholders of listed companies and the practice of illegal warranty," the report quoted Han Kang, deputy chief of Shanghai Securities Regulatory Bureau as saying.


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## DonQui (Jan 10, 2005)

I can see Shanghai surpassing Hong Kong in importance (let's face it, Hong Kong was built as the only really open site to a 1+ billion market, and as China continues opening up, this big justification for Hong Kong's existence and maintenance as a world city will crash). 

However, Tokyo, London, and NYC will be the top dogs. There is no way that Shanghai will become the world's third financial center.


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## ChinaboyUSA (May 10, 2005)

Both Shanghai and Hong Kong are growing in a fastest manner.
Besides SSE and HKSE, Shenzhen gets Stock Exchange also.


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## hkskyline (Sep 13, 2002)

DonQui said:


> I can see Shanghai surpassing Hong Kong in importance (let's face it, Hong Kong was built as the only really open site to a 1+ billion market, and as China continues opening up, this big justification for Hong Kong's existence and maintenance as a world city will crash).
> 
> However, Tokyo, London, and NYC will be the top dogs. There is no way that Shanghai will become the world's third financial center.


Hong Kong is China's largest investor, so if the investor goes down then the investee won't go unscathed either. Many people are not aware of just how close the economic relationship is and that it is not readily replaceable.


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## DonQui (Jan 10, 2005)

hkskyline said:


> Hong Kong is China's largest investor, so if the investor goes down then the investee won't go unscathed either. Many people are not aware of just how close the economic relationship is and that it is not readily replaceable.


I realize that it is not replaceable, but as China becomes more and more internationalized, and as Shanghai becomes wealtheir and develops significant infrastructure, it will have all the value of being in China like Hong Kong, but still significantly cheaper. This will matter a lot for companies who want to get a foothold thorugh the door.

I see Shanghai becoming the world's 4th most important city


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## hkskyline (Sep 13, 2002)

Actually, Shanghai is now one of the world's most expensive cities to live in. According to the Mercer Cost of Living 2005 survey, Hong Kong was the 9th most expensive city in the world at 109.5 (New York = 100). Beijing was 19th at 95.6 and Shanghai was 30th at 90.4. All three cities are more expensive than Frankfurt, Madrid, and Los Angeles.

The key to Shanghai's success is not merely cost. For a multinational to operate, there needs to be free flow of capital. Until China is able to achieve that, no Chinese city will be able to out-compete Hong Kong.


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## DonQui (Jan 10, 2005)

hkskyline said:


> Actually, Shanghai is now one of the world's most expensive cities to live in. According to the Mercer Cost of Living 2005 survey, Hong Kong was the 9th most expensive city in the world at 109.5 (New York = 100). Beijing was 19th at 95.6 and Shanghai was 30th at 90.4. All three cities are more expensive than Frankfurt, Madrid, and Los Angeles.
> 
> The key to Shanghai's success is not merely cost. For a multinational to operate, there needs to be free flow of capital. Until China is able to achieve that, no Chinese city will be able to out-compete Hong Kong.


Agreed. :yes:

Which is why I see HK remaining top in China for at least a coule dozen more years before Shanghai mounts any serious "threat."


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## ChinaboyUSA (May 10, 2005)

Shanghai is not a threat, the more Shanghai developed, the more HK developed, verse versi


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## ChinaboyUSA (May 10, 2005)

*Shanghai a mecca for Hong Kong talent*

By Sammy Chan (China Daily HK Edition)
Updated: 2005-09-02 15:48


Given Shanghai's dire need for seasoned business managers, opportunities are plentiful for Hong Kong professionals, said a top executive of a talent match-making agency. 

"Shanghai particularly favours professionals in such sectors as finance, securities and insurance, as the city's economy continues to show strong momentum and is further integrated into the world economy," Zhang Zhenbei, chief executive officer of newly-established Hong Kong-Shanghai International Exchange of Personnel Co Ltd, told China Daily. 

The city, too, is in need of experienced hands in the exhibition and property sectors. Shanghai will host the World Expo in 2010. 

"Shanghai is really short of veterans in those industries," Zhang said. "This would offer a wealth of opportunities for Hong Kong talents who are seasoned in the world's exhibition centre." 

Zhang's company, a joint venture of Shanghai Association for International Exchange of Personnel and Shanghai Industrial Investment Co, was established last month to facilitate personnel flows between the cities. 

Zhang said the mainland's largest municipality is pressing ahead with attractive measures to scoop more Hong Kong talents to fuel its long-term development amid a transformation from a manufacturing powerhouse into an international financial hub. 

The measures include simplification of entry and employment procedures, acceptance of application for residential certificates in Hong Kong and better access to international schools for their children. 

"Hong Kong talents, especially high-level managers, are among the most competitive in Shanghai's labour market," he added. 

Zhang believes Hongkongers with language advantages and a better understanding of the mainland situation could find their right niche in Shanghai, standing a better chance than foreigners. 

About 1,300 Hong Kong professionals, aged between 30 and 50, have found jobs in Shanghai since the end of 2003. More than 20 per cent were from the property sector, 16 per cent from the consultancy sector, and 14.4 per cent from the financial industry. 

Zhang also vowed his company will do its best to help local people to find positions in Shanghai. 

It would release updates of Shanghai's labour policies and vacancies of big companies. 

The company is also expected to introduce mainland talents to work in Hong Kong.


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## Nick (Sep 13, 2002)

New York for North America,London for Europe and Tokyo for Aisa.

Thats how it works.


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## Nick (Sep 13, 2002)

hkskyline said:


> Actually, Shanghai is now one of the world's most expensive cities to live in. According to the Mercer Cost of Living 2005 survey, Hong Kong was the 9th most expensive city in the world at 109.5 (New York = 100). Beijing was 19th at 95.6 and Shanghai was 30th at 90.4. All three cities are more expensive than Frankfurt, Madrid, and Los Angeles.
> 
> The key to Shanghai's success is not merely cost. For a multinational to operate, there needs to be free flow of capital. Until China is able to achieve that, no Chinese city will be able to out-compete Hong Kong.


I find that hard to believe.I was just in Shanghai 3 months ago.Its very cheap compared to most western and Japanese cities


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## kenlau13 (Sep 28, 2005)

It should be HK or Singapore but not Shanghai


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## ChinaboyUSA (May 10, 2005)

It got to be Shanghai, the biggest city (port) and with the biggest quantities of the talents in the fastest growing economy entity. It is a question of time.


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## hkskyline (Sep 13, 2002)

Nick said:


> I find that hard to believe.I was just in Shanghai 3 months ago.Its very cheap compared to most western and Japanese cities


Expatriates are not going to dine at the cheap restaurants or take the bus for a few RMB. They will most likely live in luxury serviced apartments and dine at hotels or other upper class restaurants. Hence, a cost survey based on an expatriate lifestyle, which is what Mercer has done, is more relevant than a cost amount based on a tourist's budget. Like many parts of the developing world, Chinese cities can have very cheap, and very expensive alternatives.


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## ChinaboyUSA (May 10, 2005)

Actually, the more developed, the more choices.


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## Monkey (Oct 1, 2002)

It's the global markets that decide which cities become world financial centres - not the PRC government. For that reason I think Hong Kong's transparent and consistent regulation, sound laws, and lack of corruption, give it a huge advantage over Shanghai - not to mention decades of accumulated expertise in financial markets and a much larger pool of experienced and highly skilled financial professionals. Shanghai has the hardware, the physical infrastructure of a global financial centre, but not the software. And the finance industry doesn't give a damn about how expensive a city is. If that were the case they would have decamped from London, New York, and Tokyo decades ago and outsourced to places like India.


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## globocentric (Jun 14, 2005)

Monkey said:


> It's the global markets that decide which cities become world financial centres - not the PRC government. For that reason I think Hong Kong's transparent and consistent regulation, sound laws, and lack of corruption, give it a huge advantage over Shanghai - not to mention decades of accumulated expertise in financial markets and a much larger pool of experienced and highly skilled financial professionals. Shanghai has the hardware, the physical infrastructure of a global financial centre, but not the software.


 China lacks one fundemental attribute as well. lack of proficienct english language speakers. Hong Kong, Singapore and to a lesser extent Malaysia are commonwealth countries that use English widely. In fact, most of the technical courses in their universities are still conducted in English. Singapore and Hong Kong did put this to good use and it is very hard for Shanghai to eclipse them on that basis. I do admit that China is promoting english teaching but the ability to use english as a technical language is definently more important than the ability to use it a mere second language in finance. Most english speakers in china can do the latter but not the former.


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## Monkey (Oct 1, 2002)

globocentric said:


> China lacks one fundemental attribute as well. lack of proficienct english language speakers. Hong Kong, Singapore and to a lesser extent Malaysia are commonwealth countries that use English widely. In fact, most of the technical courses in their universities are still conducted in English. Singapore and Hong Kong did put this to good use and it is very hard for Shanghai to eclipse them on that basis. I do admit that China is promoting english teaching but the ability to use english as a technical language is definently more important than the ability to use it a mere second language in finance. Most english speakers in china can do the latter but not the former.


You have a point. It's true that western firms often prefer Hong Kong or Singapore over Tokyo because of the language factor. Tokyo is largely a domestic financial cente. However I nonetheless think that Hong Kong's language advantage will be one of the easiest for Shanghai to match. I see Shanghai's long term disadvantage lying more in the corruption and instinctive interference of Chinese officialdom. That makes investors nervous. They cannot feel confident that their money is secure and they don't trust courts to make impartial decisions in the case of dispute. This point cannot be emphasisied strongly enough. Transparent regulation, enforcable property rights, and consistent rule of law are absolutely critical for any financial centre.


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## hkskyline (Sep 13, 2002)

English isn't necessarily an essential ingredient for success. The reason why Hong Kong and Singapore encourage English is to facilitate foreign trade, since these two cities depend on the intermediary hub role. China is large enough domestically to succeed with Mandarin, just as Japan has been able to succeed without English.

With the sheer size of the Chinese economy, it's very possible that domestic companies can eclipse their Western counterparts just by staying at home.


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## Monkey (Oct 1, 2002)

^ But financial business has relatively little penetration in the wider national economy. Finance is about where the deals are made - which city's accountants, lawyers, traders, and bankers are used to broker the deal. China's economy is being financed by international investors and I think they will prefer to settle their deals in Hong Kong because of the transparent regulation, uncorrupt officialdom, impartial courts, rule of law etc that I outlined before. That means employment for Hong Kong's financial professionals.


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## hkskyline (Sep 13, 2002)

^ Exactly, and CEPA will help Hong Kong's professional community have a head start over foreign professionals. However, as the economy matures and the general level of wealth increases, the domestic industry will certainly grow more self-sustainable. China will not let its financial industry be completely controlled by foreign multinationals, and a local financial services industry will flourish, just like in Japan, where English becomes less important.


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## Monkey (Oct 1, 2002)

^ Yeah China eventually generate its own investment but if China attempts to control foreign investors in Hong Kong then the international deals will be brokered in Singapore instead.


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## hkskyline (Sep 13, 2002)

China is not attempting to control foreign investors in Hong Kong. Rather, it makes sense that foreign investors who want a slice of the massive mainland consumption pie to conduct their business in Mandarin. There are ownership restrictions in place to ensure Chinese involvement in foreign-backed enterprises, and oftentimes they come in the form of a joint venture. Such practices are quite common in the West, such as in the airline industry, which puts a maximum foreign ownership cap on shares of domestic companies.

Whether the deals are conducted in Hong Kong or elsewhere won't circumvent foreign companies from such rules.


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## Monkey (Oct 1, 2002)

^ Nobody has suggested that they will get round Chinese ownership rules - although they will eventually be run down as part of China's entry to the WTO. However the territory that best accommodates foreign multinationals will succeed best. Right now Hong Kong and Singapore do that best with Hong Kong's greater proximity to China giving it the edge. In post #77 you seem to suggest that China will not allow foreign multinationals from controlling the financial services industry there. I think that the more they try to control them the less investment they will get. Western banks already question the value of the 20% shares they have bought in Chinese banks and yet China's banking system desperately needs that foreign capital to survive. China is already committed to full liberalisation of its banking sector by 2006 under WTO rules that will allow foreign banks to take controlling stakes. We are wondering somewhat off-topic here....


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## ChinaboyUSA (May 10, 2005)

*Foreign companies upset by brain drain*
(Xinhua)
Updated: 2005-11-15 10:09

Foreign companies in China are suffering from heavy brain drain with an average dropout rate of 16.7 percent this year, according to a survey by the Shanghai Association of Foreign-Invested Companies. 

The survey, based its conclusions on over 300 questionnaires completed by chief executive officers from foreign firms with a China-market experience of over 20 years and 100 big foreign transnational companies in September 2005. 

The survey showed that foreign firms, especially those engaged in fields of real estate, consumer goods, telecommunication, education and hotel business suffered most, which lose on average 20 percent of their employees annually. 

Foreign firms in commerce, pharmaceutics, chemical industry, finance and electronic manufacturing also lost 15 to 20 percent of their employees. The lowest brain drain rate in the survey was 5 percent. 

About 75 percent of the respondents said that the brain drain rate should be kept under 15 percent in order to achieve sustainable company development. 

William H. Mobley, a professor with the China-Europe International Business School (CEIBS) said that the cost of the brain drain depends upon the tier of staff. 

The fast economic growth in China has boosted the number of foreign firms and the demand for highly-educated employees. The number of employees in foreign companies in the real estate sector, for example, has surged by 45 percent annually. 

For managerial staff working in foreign-invested firms, job-hopping is an effective way to lift salary. 

Zheng Weihao, a restaurant foreman in a foreign-invested five-star hotel in Shanghai, changed his jobs three times over the past four years, during which his monthly salary increased from 2,000 yuan (250 US dollars) to 6,000 yuan (750 dollars). 

"If I had kept the first job waiting for a promotion, I could only have my salary doubled at the best bet," he said. 

Meanwhile, foreign companies are loosing attractions to Chinese talents, because the gap of the employee's salary in foreign and Chinese firms is shrinking, and the differences in management mode are fading. 

For instances, Zhang Yanmei, former human resources manager of Sony China, quit her job to work as vice president of Shanda Interactive Entertainment Ltd., a Nasdaq-listed Chinese Internet media firm. Tong Xuesong, a former high-ranking executive in Motorola found his new position as vice president of TCL, a leading home appliance maker in China. 

"Working for domestic firms would give us more self-esteem and sense of accomplishment than for foreign companies," said a manager in a privately-owned Chinese firm.


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## nick_taylor (Mar 7, 2003)

There is an article in todays Financial Times that states that Hong Kong is China's preferred stock market and that it will remain so for sometime, its on page 6 of the International News section if anyone is interested.


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## hkskyline (Sep 13, 2002)

Monkey said:


> ^ Nobody has suggested that they will get round Chinese ownership rules - although they will eventually be run down as part of China's entry to the WTO. However the territory that best accommodates foreign multinationals will succeed best. Right now Hong Kong and Singapore do that best with Hong Kong's greater proximity to China giving it the edge. In post #77 you seem to suggest that China will not allow foreign multinationals from controlling the financial services industry there. I think that the more they try to control them the less investment they will get. Western banks already question the value of the 20% shares they have bought in Chinese banks and yet China's banking system desperately needs that foreign capital to survive. China is already committed to full liberalisation of its banking sector by 2006 under WTO rules that will allow foreign banks to take controlling stakes. We are wondering somewhat off-topic here....


China's banks are not in dire need of foreign capital. Rather, they need to restructure internally to lower the bad debts. Some foreign banks have bought into recent mainland bank IPOs, but these are all strategic investments, and don't comprise a large percentage of the shareholdings. 

The irony is such shareholding caps are quite common in the West, so once the WTO agreements are fully enforced in China, they will have far more liberal views of global trade than many Western nations.


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## ChinaboyUSA (May 10, 2005)

*Shanghai has a broader role to play*

2005-12-24 07:38


Two weeks after the opening of the Yangshan Deep-water Port, substantially raising Shanghai's profile as an international shipping centre, Pudong International Airport began its second phase of construction on Thursday - set to transform the airport into the third largest in the world by 2010.

The two gigantic projects represent major advances in the transportation infrastructure of the city, strengthening its competitiveness both domestically and internationally.

While Shanghai should spare no effort in realizing its aspiration to become an international economic, financial, trade and shipping centre, the city should also do more to serve the Yangtze Delta, the East China area and the whole country.

There is no doubt that Shanghai has done a great deal in that respect already, by indirectly helping other regions across China.

Most of the passengers that come and go through Shanghai's Pudong Airport are not locals.

Shanghai has also opened its arms to numerous Chinese and foreign companies - 20,000 businesses from neighbouring Zhejiang Province alone have found a place in the metropolis.

A large amount of the trade passing through Shanghai's customs comes from or goes to other provinces.

Shanghai houses the stock exchange, gold exchange, forex exchange, diamond exchange, technology exchange, talent market and many other essential markets utilized by people throughout the country.

Shanghai itself has also become the home for numerous professionals and migrant workers from all over China.

Despite all these excellent contributions to the region and nation, the city could do more.

Shanghai should no longer compete - or at least not as fiercely - with neighbouring provinces for foreign direct investment intended for manufacturing projects. Shanghai's limited land resources and deteriorating environment simply do not allow that.

Shanghai should speed up the shift of its manufacturing businesses to neighbouring provinces.

Shanghai should also be more than pleased to see its immediate neighbour, Suzhou, boasting a microelectronic industry on par with its own.

Of course, helping others does not just mean offering financial assistance without reciprocity, especially now that China has switched to a market economy.

A win-win game has been the catchword in China over the last few years. This should also be true for Shanghai as it plays a more important role in serving the region and the whole nation.

Fortunately the 11th Five-Year Plan (2006-2010) for Shanghai, currently being drawn up, will have an emphasis on the city playing this kind of role.

The plan, which will be announced in a few weeks - after its approval by the Municipal People's Congress - is likely to reflect Shanghai's generosity and also the spirit of win-win opportunities that will dominate much of the 21st century in China.

Shanghai should celebrate its amazing achievements over the last decade. It has a formidable task ahead to become an international economic, financial, trade and shipping centre; and better serving the whole country should remain a priority. 


(China Daily 12/24/2005 page4)


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## touchring (Mar 25, 2005)

It will take some time for capitalism to catch up fully in Shanghai. For now, it's still manufacturing.


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## Inabowl (Nov 14, 2005)

hkskyline said:


> English isn't necessarily an essential ingredient for success. The reason why Hong Kong and Singapore encourage English is to facilitate foreign trade, since these two cities depend on the intermediary hub role. China is large enough domestically to succeed with Mandarin, just as Japan has been able to succeed without English.
> 
> With the sheer size of the Chinese economy, it's very possible that domestic companies can eclipse their Western counterparts just by staying at home.


Foreign trade? :laugh: Can you give us the number of foreign residents and visitors in HK? HK's GDP is like the 10th largest when compared to the Japanese prefectures. A lot of the Japanese speak good English. It's just one of the political strategies that the Chinese use to beat Japan. Nice. You can never beat Japan.


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## Inabowl (Nov 14, 2005)

This is the reality.

*The Forbes Global 2000 - A World Of Big Companies *


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## ailiton (Apr 26, 2003)

Inabowl said:


> Foreign trade? :laugh: Can you give us the number of foreign residents and visitors in HK? HK's GDP is like the 10th largest when compared to the Japanese prefectures. A lot of the Japanese speak good English. It's just one of the political strategies that the Chinese use to beat Japan. Nice. You can never beat Japan.


Hi DoubleR.

No. The reality is, very very few Japanese speak good English and those who do are living abroad.


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## pottebaum (Sep 11, 2004)

Keep the whole freaky China vs Japan thing oughta here!


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## ChinaboyUSA (May 10, 2005)

To that one in Tokyo, please make it clear that you put the year 2000 statistics on the thread which is totally out of date. Plus, a country's economic power is not only the numbers of the big companies, what about small business?
Anyway, we see the total GDP of China is on the fourth position in the world on the year of 2005, while it is a big issue to balance the income distribution.


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## pottebaum (Sep 11, 2004)

Those aren't year 2000 statistics--They were compiled this year. "Forbes 2000" is just the name of the listing (world's 2000 largest companies).


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## DonQui (Jan 10, 2005)

I re-iterate what I have said.

1) New York
2) London
3) Tokyo
4) Hong Kong-Paris


I see it virtually impossible for Shanghai to displaice Tokyo, Hong Kong, and Paris to become the world's third largest financial center.

China's economic progress has been largely due to its amazingly cheap work force. Until China becomes richer and starts generating HOME GROWN companies that trade on the stock market, Shanghai will not be an important financial center. That honor will remain only with Hong Kong.


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## czm3 (Dec 4, 2004)

ChinaboyUSA said:


> Anyway, we see the total GDP of China is on the fourth position in the world on the year of 2005, while it is a big issue to balance the income distribution.


Who cares?
Germany's economy has been bigger than the UK's for a long time, but its still all London. frankfurt is a drop in the bucket.


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## ChinaboyUSA (May 10, 2005)

DonQui said:


> .....
> China's economic progress has been largely due to its amazingly cheap work force. Until China becomes richer and starts generating HOME GROWN companies that trade on the stock market, Shanghai will not be an important financial center. That honor will remain only with Hong Kong.


Something need to correct,
1. China's economic growing is based on many factors;
2. Shanghai is a an important financial center.
3. China is becoming richer, Shanghai has its own basis to develop as a world financial center, and it is different from Hong Kong. Shanghai shares similarities with Hong Kong, but is not going to be another Hong Kong.

Shanghai is the commercial center of the world's 4th biggest Economy, and China owns a big share of the US treasury debt. So, whenever you put the conclusions here, please consider the factors in a conprehensive way.


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## DonQui (Jan 10, 2005)

ChinaboyUSA said:


> Something need to correct,
> 1. China's economic growing is based on many factors;
> 2. Shanghai is a an important financial center.
> 3. China is becoming richer, Shanghai has its own basis to develop as a world financial center, and it is different from Hong Kong. Shanghai shares similarities with Hong Kong, but is not going to be another Hong Kong.
> ...


As someone else pointed out, Frankfurt is the financial capital of the world's 3rd largest economy, it still does not count as one of the Top 3 financial centers.

And I am sorry, China's growth is primarily due to manufacturing and a heavy reliance on foreign investment. Until native companies start behaving like American mulitnationals, it will NOT be the world's 3rd financial center.


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## czm3 (Dec 4, 2004)

ChinaboyUSA said:


> Something need to correct,
> 1. China's economic growing is based on many factors;
> 2. Shanghai is a an important financial center.
> 3. China is becoming richer, Shanghai has its own basis to develop as a world financial center, and it is different from Hong Kong. Shanghai shares similarities with Hong Kong, but is not going to be another Hong Kong.
> ...


Shanghai is important and may surpass HK as China's finance center, but it will have a very long way to go till it can compete with Tokyo.

Why do Chinese like to underwrite US debt? Because the average Chinese investor has more faith in the stability and future growth of the Doller.

Like someone else said, all that money that is being invested in China is mostly related to companies that find themselves on exchanges outside of China.

*EDIT*

Also, it must be noted that if China is to be a major finance player, they need to drop the peg against the basket of western currencies. At least they dropped the peg against the doller. Furthermore, curruption needs to be controlled, and they have to get rid of the communist party.

I see all these things happening in China, but it will be a long time till it all comes together.


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## postmodern (Nov 3, 2003)

^When there is only one Chinese saying stupid things, don't label ALL Chinese.


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## czm3 (Dec 4, 2004)

postmodern said:


> ^When there is only one Chinese saying stupid things, don't label ALL Chinese.


Where and how have I labeled all Chinese?


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## ChinaboyUSA (May 10, 2005)

DonQui said:


> .....
> 
> And I am sorry, China's growth is primarily due to manufacturing and a heavy reliance on foreign investment. Until native companies start behaving like American mulitnationals, it will NOT be the world's 3rd financial center.


Manafacturing is the cornerstone of any industry society, and continuously to be one of the pillar industry in developed nations as well. Don't forget that Agricultural Industry including the high-tech/bio-tech usage field is a big role in China's economy. We see the 3rd industry (the service category) is growing rapidly in China, especially in the cities like Shanghai.

It is crutial for the American multinationals to learn how to do business in China.


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## postmodern (Nov 3, 2003)

czm3 said:


> Where and how have I labeled all Chinese?


In fact ur comments r very objective and insightful as long as you don't take one as all.
If I am mistaken, I apologize.


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## wecky (Feb 21, 2005)

_*a very impressive news for Shanghai.*_

_____________________


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## czm3 (Dec 4, 2004)

postmodern said:


> In fact ur comments r very objective and insightful as long as you don't take one as all.
> If I am mistaken, I apologize.


Of course not, I just dont know how my previous comment may have mislead you into thinking that.

Its all good, and for the record, China is at the top of my travel list right now because I am extremely interested.


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## IshikawajimaHarima (Aug 3, 2005)

czm3 said:


> Shanghai is important and may surpass HK as China's finance center, but it will have a very long way to go till it can compete with Tokyo.
> 
> Why do Chinese like to underwrite US debt? Because the average Chinese investor has more faith in the stability and future growth of the Doller.
> 
> ...


Chinese currency is still very undervalued. But they have the reason that can't revalue it don't they?


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## Mosaic (Feb 18, 2005)

What will happen if Chinese government revalues the currency?


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## Manila-X (Jul 28, 2005)

A little off topic is what most people don't know is, Hong Kong uses a different currency than the mainland which is the dollar 

The Hong Kong Dollar is much stronger than The Yuan and is one of the strongest currencies in Asia! 

I doubt that Shanghai will surpass HK in finance!


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## postmodern (Nov 3, 2003)

^Wow, let me almost forget about what happened in 1998 completely.


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## Manila-X (Jul 28, 2005)

postmodern said:


> ^Wow, let me almost forget about what happened in 1998 completely.


But that's history though! Every major Asian country have bounced back from the crisis! Especially those who were affected the most!


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## Inabowl (Nov 14, 2005)

ChinaboyUSA said:


> Anyway, we see the total GDP of China is on the fourth position in the world on the year of 2005, while it is a big issue to balance the income distribution.


The Chinese GDP being #4 is true, but the standard of living (per capita) is very poor because of its huge population. Similarly I'd put Japan on the same league as the UK, France or Germany in terms of the size of its economy. For example if you double the British population, the UK's GDP will be the same as Japan's. However China needs 3 billion people to catch up Japan in the same way.


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## hkskyline (Sep 13, 2002)

IshikawajimaHarima said:


> Chinese currency is still very undervalued. But they have the reason that can't revalue it don't they?


The US Dollar is extremely undervalued as well. It's about 20-30% lower than a couple years ago. Did the US economy lose 20-30% of its global might during that time? I doubt it, so the exchange rate doesn't reflect the economic reality.

The Japanese want to keep their yen low as well to boost its exports. Every country in the world practices some form of exchange rate control through its monetary policies.


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## ChinaboyUSA (May 10, 2005)

*Market trades 25% less by value*
(Shenzhen Daily)
Updated: 2006-01-03 09:09

The country’s stock market traded 25 percent less by value in 2005 than the previous year, according to statistics from the Shanghai and Shenzhen stock exchanges. 
A total 3.17 trillion yuan (US$392 billion) of shares was traded on the nation’s two stock exchanges in 2005, the Shanghai and Shenzhen stock exchanges said on their Web sites. 

The Shanghai Composite Index fell 8.3 percent last year and the Shenzhen Composite Index dropped 11.7 percent, making them the fourth and third-worst performers of 2005 of the 78 global benchmarks. 

Shares worth 1.92 trillion yuan and 1.24 trillion yuan were traded on the Shanghai and Shenzhen markets, respectively, the exchanges said. 

Shares ended down Friday in the last session of 2005, with the benchmark index charting its worst year-end close in seven years on liquidity concerns following the launch of the country’s nontradable-share reform program. 

Liquidity concerns, which pressured the market for most of the year, will continue to be the biggest factor to prevent the market from rebounding strongly this year, said Zhang Yongpan, an analyst at Sealand Securities.


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## ChinaboyUSA (May 10, 2005)

*Shanghai's fiscal revenue tops $50 bln in 2005 * 

SHANGHAI, Jan. 3 (Xinhuanet) -- China's largest city Shanghai reported 409.58 billion yuan (50.5 billion U.S. dollars) of fiscal revenue in 2005, up 13.9 percent over the previous year, the municipal finance and taxation authorities confirmed Tuesday. 

The figure is 1.3 times as much as the city's 2000 fiscal revenue, representing an average annual rise of 18.5 percent. 

In 2005, Shanghai's taxation authorities reported 266.4 billion yuan (32.8 billion U.S. dollars) of fiscal revenue, while the city's local fiscal revenue topped 143 billion yuan (17.65 billion U.S. dollars), according to figures provided by the municipal finance and taxation authorities. 

To date, Shanghai's increase in fiscal revenue has topped its GDP growth for 13 years in a row. 

In 2005, Shanghai's fiscal revenue increase in the tertiary industry topped that of the second industry by at least 10 percent, thanks to the rapid expansion of the service sector. 

On the other hand, corporate and personal income taxes posted a bigger growth rate than value-added and business taxes. 

Chinese Finance Minister Jin Renqing has predicted China's government revenues are expected to top 3 trillion yuan (370 billion U.S. dollars) in the 2005 fiscal year, up more than 15 percent over the 2.6 trillion yuan (321 billion U.S. dollars) reported in 2004. 

Toward the end of last year, China's capital Beijing expected its 2005 fiscal revenue to top 90 billion yuan (11 billion U.S. dollars). Enditem


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## ChinaboyUSA (May 10, 2005)

Thursday January 5, 12:08 PM

*Shanghai Port Becomes World's Largest Cargo Port*

SHANGHAI, Jan 5 Asia Pulse - Shanghai Port has become the world's largest cargo port, with its cargo handling capacity topping 443 million tons in 2005, higher than that of Singapore Port, according to the latest statistics of Shanghai Port Management Department.
The rapid development of the Chinese economy and the hinterland resource advantage of Yangtze River Delta are the main reasons underlining Shanghai Port's achievement. It only took Shanghai Port five years to double cargo handling capacity from 200 million tons to 400 million tons.

However, there is still a big gap between Shanghai Port and Singapore Port in container handling capacity. The latest statistics show that Shanghai Port handled 18.09 million TEUs (twenty foot equivalent unit) of containers in 2005, rising 24.2 per cent over the previous year and taking the third position in the world. In contrast, Singapore Port handled 21.2 million TEUs of container in the first 11 months of 2005, rising 8.4 per cent. In terms of growth rate, the container handling capacity of Shanghai grew much faster than that of Singapore Port.

The economic development of Shanghai, Yangtze River delta and Yangtze River valley has also fuelled the development of Shanghai Port. At present, Shanghai Port has opened shipping lines around the globe, with ocean shipping lines extending to Europe, America and Australia and offshore shipping lines to Japan and Southeast Asia. The number of voyages amounts to 1,967 monthly, including 942 international ones.

(XIC)

http://asia.news.yahoo.com/060105/4/2dg1a.html


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## ChinaboyUSA (May 10, 2005)

*China share prices rise*
Associated Press

SHANGHAI, China - Chinese stocks rose Tuesday, with gains strongest among dollar denominated "B-shares" sold to both foreign and domestic buyers.
Chinese investors, their purchasing power boosted by the strengthening Chinese yuan, were the most active buyers, analysts said.
The benchmark Shanghai Composite Index, which tracks B shares and yuan-denominated "A shares," gained 1.4 percent to 1,104.04. The Shanghai B-share index rose 3.4 percent to $61.45. Shenzhen's Composite Index rose 1.7 percent to 260.27.
The Shanghai index has rebounded since falling to an 8-year low of 1,013.64 on June 3.
China on July 21 abandoned the yuan's fixed-rate link to the U.S. dollar and now lets it trade within a 0.3 percent band set against a basket of unspecified foreign currencies. It also re-set the the yuan's exchange rate at 8.11 to the dollar.
Shanghai's B shares have "become more attractive to investors in recent days as China's yuan continues to appreciate against the U.S. dollar, allowing domestic investors to buy more B shares," said Lu Jiehua, an analyst at Shanghai Shenyin Wanguo Research and Consulting Co.
Chinese automakers' shares also rose sharply on expectations of improved earnings reports for the first half of the year, after passenger car sales rose 10.6 percent on-year to 1.84 million units. Shares in Jingling Motors, FAW Jinbei and Beiqi Futian all showed gains of 3 percent or more.
In currency trading, the yuan ended at 8.1032 per U.S. dollar on Tuesday, stronger than Monday's close of 8.1046. It was the fifth consecutive session of gains for the Chinese currency.


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## zach24 (Sep 26, 2005)

Inabowl said:


> This is the reality.
> 
> *The Forbes Global 2000 - A World Of Big Companies *



yes this is the reality - and unfortunately china will become a country owned by foriegn investment


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## zach24 (Sep 26, 2005)

ChinaboyUSA said:


> Something need to correct,
> 1. China's economic growing is based on many factors;
> 2. Shanghai is a an important financial center.
> 3. China is becoming richer, Shanghai has its own basis to develop as a world financial center, and it is different from Hong Kong. Shanghai shares similarities with Hong Kong, but is not going to be another Hong Kong.
> ...


Im sorry in Real GDP (determing an economies strength internationally) CHINA IS NOT NUMBER 4!!! its more like 6-8 - get your facts right and dont look at PPP GDP - PPP is good if you are looking at domestic issues but if China is really to be a financial heavy weight (i doubt it) it needs a strong GDP in REAL TERMS not the fake PPP! 

Tokyo, Paris, London will not be replaced by Shanghai


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## zach24 (Sep 26, 2005)

Largest stock exchanges in the world:

1 NYSE (12.389 trillion market capitalisation)
2 Tokyo (3.5)
3 London (2.788)
4 Euronext (2.4)
5 Germany (1.153)
6 Toronto (1.143)
7 Spain (.927)
8 HK (.839)
9 Switerland (.804)
10 Sydney (.8) 
...
...
...
...
17. Shanghai .296

Source International Federation of Stock Exchanges (FIBV) 2005


sorry this is a JOKE that Shanghai is on the verge of becoming a financial economic giant! JOKE JOKE JOKE!


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## General Huo (Jan 4, 2005)

zach24 said:


> yes this is the reality - and unfortunately china will become a country owned by foriegn investment


Forbes 2000 list is totally meaningless to China, because it only list those companies listed in stock markets, and most of Chinese largest companies are state-owned are not listed in stock markets, or only parts of their assets are tradable and listed in stock markets. Actually even private comapnies like Huawei is traded in any stock markets, but they are definitely in top 2000 largest compnies in the world.

The Chinese is not owned and will never be owned by foriegn investment. That's the hard reality. :cheers:


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## Pax Sinica (Dec 10, 2005)

Face the reality, USA have already lost a trillion US dollars in the last 10 years and the gap is skyrocketing.

U.S. Trade Deficit with China
US$-6,000,000 in 1985
US$-33,789,500,000 in 1995
US$-39,520,200,000 in 1996
US$-49,695,500,000 in 1997
US$-56,927,400,000 in 1998
US$-68,677,100,000 in 1999
US$-83,833,000,000 in 2000
US$-83,096,100,000 in 2001
US$-103,064,900,000 in 2002
US$-124,068,200,000 in 2003
US$-161,938,000,000 in 2004
US$-166,835,400,000 in 2005

Source: http://www.census.gov/foreign-trade/balance/c5700.html#2005

Now who is joking? China's joke is worth a trillion US dollars.


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## coldstar (Jan 14, 2003)

Shangahi is becoming the world's 3rd financial center? 
What a daydtream and faraway dream!! bad joke indeed.
What on earth does china have any global megacorporations?
How about world currency? 
US Dollar, UK Pound, Japan Yen, Euro...all the major key international currrencies. but Chinese money is only the waste paper outside china, as everyone knows.


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## London (Jun 12, 2005)

It wont become the financial centre of the world... we already are in, London. But definitely a financial centre nonetheless :yes:


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