Shanghai aims to become an irreplaceable international financial center for development | International Financial Center | Shanghai

Standing in the middle of 2023, looking back at 2020, it can be found that it was a year of continuity between the Chinese economy and the Shanghai economy. That year, the 13th Five Year Plan came to an end, and the Fifth Plenary Session of the 19th Central Committee proposed that the theme of promoting high-quality development should be the focus of economic and social development during the 14th Five Year Plan period. In 2020, Shanghai was basically built as an international financial center that is in line with China's economic strength and the international status of the renminbi. The construction of Shanghai's international financial center has moved from version 2.0 to version 3.0.

Under the theme of high-quality development, the construction of Shanghai International Financial Center has unique characteristics and tasks compared to before. At the 14th Lujiazui Forum, which opened on the 8th, Chinese and foreign experts discussed this issue from multiple perspectives such as functional construction, expanding opening up, and internationalization of the RMB.

Special emphasis on high-level openness

The main task of version 3.0 is to deepen the functionality of Shanghai International Financial Center.

Tu Guangshao, Chairman of the Shanghai New Financial Research Institute and Executive Director of the Shanghai Advanced School of Finance at Shanghai Jiao Tong University, believes that there are mainly three aspects to deepening the function. One is to focus on goals, as entering a new stage of development, high-quality development has put forward a series of new requirements for the construction of Shanghai International Financial Center, such as promoting technological innovation, green and low-carbon development, digital transformation, and meeting the needs of the people for wealth management. We need to focus on these goals. The second is to improve functions, including asset pricing, resource allocation, and risk management. The third is to further deepen reform and expand opening up.

Tu Guangshao pointed out that special attention should be paid to high-level opening up. One is to transform from market openness to institutional openness; Secondly, we need to shift from the openness of traditional elements to the openness of new elements such as data; The third is to open up the field of sustainable finance, which is a global trend and also a need for China's own development; The fourth is to shift from "border" opening to "post border" opening, so that overseas funds, investors, institutions and national treatment can better match.

"The most important openness is institutional openness, which is the most important guide for the new process of opening up the Shanghai International Financial Center," said Tu Guangshao.

Not pursuing replicability and promotability

The formation of replicable and promotable experiences through pilot projects to further transmit reform and opening up has been an important experience of China over the past 40 years.

Of course, there are also exceptions. Zhou Xiaochuan, Vice Chairman of the Boao Forum for Asia and Chief Representative of China, believes that if the target is positioned in the international financial market with competitive advantages globally, China can accommodate at most one or two companies, including Shanghai.

Zhou Xiaochuan said that international financial centers do not pursue replicability or scalability, but there is also a common feature that production factors need to flow freely. The Shanghai Free Trade Zone is open to both goods trade and emphasizes the service industry, which is a special mission entrusted by the Central Committee of the Communist Party of China and the State Council to establish an international financial center in Shanghai.

The construction of Shanghai International Financial Center is different from Dubai and requires a basic condition, which is the free use of the RMB. Zhou Xiaochuan believes that the focus of the construction of Shanghai International Financial Center should be on the main products of the capital market, such as stocks, bonds, foreign exchange, credit, payments, etc. Greater market openness requires a significant increase in the degree of free use of the RMB.

On this basis, the construction of Shanghai as an international financial center will involve how to develop financial products. Zhou Xiaochuan said that in the future, Shanghai may allow foreign enterprises, especially high-quality enterprises in the "the Belt and Road" countries, to carry out financing and listing transactions in the market through CDR and other forms. Although there will be many policy issues involved, it should be said that there is still a lot of room for advancement, which will also play an important role in promoting the construction of Shanghai International Financial Center.

"Young people with boundless prospects"

Liang Xinsong, Deputy Governor of the Monetary Authority of Singapore, believes that Shanghai will become a key global financial center. He said that China is one of the largest economies in the world and has very deep trade relations with Asia and the world. He said, "I believe that in the future development, Shanghai will be built into an international financial center, achieving a balance between growth and risk."

HSBC Holdings Group Chairman Du Jiaqi believes that Shanghai has a great opportunity to become a green finance center in China, Asia, and the world. Du Jiaqi highly appreciates Shanghai's financial innovation: "I see that Shanghai is full of energy and vitality. The recovery after the epidemic will bring huge opportunities to Shanghai. Leading industries such as new energy, new materials, and artificial intelligence will further promote Shanghai's development."

"The Western financial markets are like mature middle-aged people, while China is like dynamic and promising young people," said Bruce Cash, co-founder of Oak Capital. "Drawing on the experience of overseas market development will help Shanghai's own path to openness."