Where does the attraction of Shanghai International Financial Center come from? Lujiazui Forum opens today

Release time:Jun 18, 2024 16:56 PM

Today, the 2024 Lujiazui Forum will open in Shanghai. Global financial professionals will gather in Shanghai again to contribute financial wisdom to the development of the world economy.

Since the beginning of this year, many international financial professionals have come to Shanghai, including UBS, HSBC, Standard Chartered, and JP Morgan Chase, all of whom have come to Shanghai to take root and invest in China.

Obviously, the huge appeal of this international financial center is still growing.

In late May, the Jing'an Shangri-La Hotel was packed with financial professionals in suits and ties. The 20th JPMorgan Chase Global China Summit was being held here, and the 2,500 participants from all over the world made the venue seem a bit crowded.

This is the second time that this world-renowned brokerage firm has held a summit in Shanghai. Jamie Dimon, Chairman and CEO of JPMorgan Chase, also made a special trip to the scene to give a speech.

When the summit was first held in Shanghai last year, Jamie Dimon said that the summit attracted many global investors to Shanghai, which reflected the confidence in the development of China and Shanghai. In recent years, JPMorgan Chase has made great progress in various businesses in Shanghai. In the future, it will increase its business layout in Shanghai and play a bridging role for global companies to understand and invest in Shanghai.

The considerable progress made by foreign-funded institutions in Shanghai has been noticed by their global counterparts. Since 2024, new foreign-funded institutions have continued to increase their investment in the Chinese market through Shanghai. Not long ago, BNP Paribas Securities Co., Ltd. was approved for establishment and is registered in Shanghai with a registered capital of RMB 1.1 billion, which is 100% funded by BNP Paribas. Allianz Fund, a subsidiary of Germany's Allianz Group, became the sixth wholly foreign-owned public fund newly established in Shanghai. Previously established public funds such as BlackRock and Schroders have begun to issue fund products in the Chinese capital market. Robeco and Fidelity also announced further capital increases this year.

At present, the country's six newly established wholly foreign-owned public offering funds, foreign-controlled joint venture financial management companies established with the participation of the five major domestic banks, and more than half of the newly established foreign-controlled securities companies are all located in Shanghai. 92 internationally renowned asset management institutions participated in the Shanghai Qualified Foreign Limited Partner Pilot Program, and 63 participated in the Qualified Domestic Limited Partner Pilot Program. The Lingang New Area International Reinsurance Functional Zone has attracted 15 Chinese and foreign property and casualty insurance companies' reinsurance operation centers and 4 insurance brokerage companies to settle in...

So, what attracts global financial institutions to Shanghai?

The huge attraction comes from strong competitiveness.

In 2023, HSBC Group's wealth management investment assets in mainland China increased by 53% over the previous year, and the total number of wealth management customers increased by more than 30% year-on-year. Such growth undoubtedly comes from the potential of China's vast market. Therefore, in January 2024, HSBC's first new generation wealth management flagship branch officially opened in Shanghai, aiming to accelerate the transformation of the bank's wealth management service ecosystem. With Shanghai as the center, HSBC hopes to promote this new ecosystem to other parts of China.

The same growth is also reflected in Standard Chartered Group. In 2023, Standard Chartered's onshore and offshore business revenues in China increased by 24%, and pre-tax operating profit increased threefold in the past year to US$1.3 billion. Shanghai is Standard Chartered's most valued Chinese headquarters, with Shanghai employees accounting for 43% of the total number of employees nationwide. Standard Chartered Group Chairman Wei Haosi believes that Standard Chartered can gain more opportunities as Shanghai continues to enhance its international appeal.

Financial giants recognize Shanghai and come to Shanghai because of the competitiveness and influence brought by the construction of Shanghai International Financial Center. It is not difficult to find that the construction direction of Shanghai International Financial Center has always been quite global - global asset management center, international green financial hub, global financial technology center... Every step of the construction is working hard to allocate global resources for Shanghai and promote the world economy.

In May 2021, Shanghai took the lead in the country to propose the goal of building a global asset management center. After three years of hard work, Shanghai's asset management scale has accounted for nearly 30% of the country, among which public, private and insurance asset management rank first in the country.

Where does the attraction of Shanghai International Financial Center come from? Lujiazui Forum opens today

In the same year, Shanghai began to build an international green finance hub. Relying on the national carbon emission trading market, Shanghai took the lead in launching a number of green financial products, issued the "Shanghai Transformation Finance Catalogue" to implement "Transformation Finance Loans", and launched the Shanghai Green Financial Service Platform. As of the end of the first quarter of 2024, the balance of green financing in Shanghai has exceeded 1.5 trillion yuan.

The global financial technology center that started earlier will also usher in a new round of construction plans with "global competitiveness". Shanghai will adhere to the combination of technology promotion and demand pull to promote the development of key underlying technologies of financial technology; promote the construction of important financial technology infrastructure, create a number of internationally leading financial technology application scenarios; rely on major pilot projects in the field of financial technology to comprehensively improve financial technology innovation capabilities and risk prevention levels.

For Shanghai International Financial Center, the key to building competitiveness is to have the driving force for reform and opening up.

"Shanghai will shift from financial pipeline-style opening to institutional opening." Zhou Xiaoquan, executive deputy director of the Shanghai Municipal Party Committee's Financial Office, made it clear that Shanghai will promote high-level institutional financial opening-up on a larger scale, in wider areas, and at a higher level.

Tu Guangshao, executive director of the Shanghai Advanced Institute of Finance at Shanghai Jiao Tong University, explained: "A higher level of financial openness is the basis for a higher level of allocation of international financial resources, and a high level of allocation of international financial resources is the inevitable path to achieving the goal of building a first-class international financial center."

He believes that Shanghai International Financial Center should not only allocate domestic financial resources, but also play the role of a platform for resource allocation at the international level and in the world. On the one hand, it should gather more and wider financial resources in Shanghai, and realize the radiation and allocation of factor resources through the global financial market of Shanghai International Financial Center. On the other hand, it should support the financial services of Chinese financial institutions to go global, provide good financial services for domestic enterprises to go overseas, and thus form the intersection and linkage of domestic and international resources.

In fact, Shanghai International Financial Center has begun to accelerate its progress in this direction.

Focusing on "bringing in", Shanghai is preparing to build an international financial asset trading platform, improve the level of international reinsurance center, innovate international futures and options products denominated in RMB, and continuously improve the internationalization level of financial markets. Shanghai will also revise the "Regulations on Promoting the Construction of an International Financial Center in Shanghai" to improve the legal level of the financial center. It will expand the business scope of foreign-funded financial institutions in Shanghai and fully implement national treatment.

Focusing on "going global", Shanghai will connect with international economic and trade rules such as CPTPP and DEPA, make efforts in upgrading the functions of free trade accounts and developing offshore bonds in free trade zones, study and launch an action plan for Shanghai International Financial Center to serve enterprises' "going global", and steadily develop cross-border finance and offshore finance.

The vision of Shanghai International Financial Center is to promote high-level allocation of global resources through high-level financial opening, thereby influencing and promoting the economic growth of China and the world. This is completely consistent with the theme of the Lujiazui Forum, "Promoting world economic growth through high-quality financial development". Shanghai's attractiveness, competitiveness and action will once again be conveyed to the world through the Lujiazui Forum.

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