Shenzhen Pits Shanghai for China's Financial Center

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Last updated at: (Beijing Time) Tuesday, March 18, 2003

Shenzhen Pits Shanghai for China's Financial Center

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To consolidate Shenzhen's status as a regional financial center, the city recently published an 18-article regulation on supporting financial development. By pitting against Shanghai the city's intention to become China's only financial center is quite apparent, expert pointed out.

The new regulation is aimed at creating a more favorable environment to bring real benefits to financial institutions, finance official of Shenzhen government told reporter recently.

Despite that, facing the growth enterprise market (GEM), which has long been called for but reluctant to show up, Shenzhen in fact slowed down its paces towards a financial center in recent two years, economist Mao Yushi pointed out. But now the city's strategy to join hands with Hong Kong is very correct.

March forward with all might

Shenzhen's financial industry took 12 percent of the city's GDP and over one fourth of the tertiary industry, its position as one of the three pillar industries in the city was further strengthened, noted Yu Youjun, Shenzhen mayor in January 2003.

What's more important is that Shenzhen government pays great attention and offers full support to the reform and development of financial industry, and is now busily studying related policies and measures to create a favorable financial environment, Yu added.

Shenzhen needs indeed new strength to improve its investment environment, and most of the articles of the regulation are new policies, but some services have already been put into operation.

According to the regulation, a financial capital management office, a consultative committee on financial policy and a special fund will be set up. The office will soon be put into operation.

How to wrestle with Shanghai?

Stressing its position as a regional financial center, how is Shenzhen going to measure its strength with Shanghai?

Generally a country has only one national financial center, even the US, said Mao. Currently China doesn't have conditions to possess two financial centers, and it has not been decided yet which will become the financial center, Shanghai or Shenzhen, and competition between the two is unavoidable

Yet Shanghai is generally favored as a domestic financial center, Mao said, as it has a good historical background and had in fact been the financial center of the whole far-east region even before liberation. What's more, Shanghai also has more favorable conditions on its culture and state policy.

So as pointed out in its regulation, Shenzhen is to actively push forward exchanges and cooperation between overseas and domestic banking, securities and insurance industries in information, technology, service and financial innovation, as well as to deepen long-term, stable cooperation between Shenzhen and Hong Kong and strengthen ties with Hong Kong financial industry.

By PD Online Staff Li Heng

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