BEIJING, June 12 /Xinhua-PRNewswire/ -- CEOCIO Magazine, through its China Business Feature ( http://www.cbfeature.com ), recently reported its take on China’s financial cornerstones in its latest report, “A Tale of Two Financial Cities.”
It’s difficult to say which city, Beijing or Shanghai, deserves the title “China’s Financial Center.” Regional economy and traditional financial resources are essential for any city to become a real financial center.
China has opened up foreign banks’ access to millions of potential retail customers and allowed greater freedom for their branch site selection. In March, five foreign banks promised to open branches in Beijing, while Shanghai landed branches of all nine of the first foreign banks to enter China. The financial strengths and potentials have thus become their key considerations to select branch site.
The financial industry has been important to Beijing’s local economy. In 2006, it became the city’s second economic pillar, accounting for 12.5% of its GDP. But the proportion in Shanghai was just 7.8%. The reason lies in the fact that Shanghai has a much larger aggregated economy and its economy growth is contributed mostly by diversified industries.
In addition, Shanghai was the first city to open up to foreign financial institutions. It is close to the Yangtze Delta, which sees China’s most developed economy. It is also the first place where foreign banks gathered. According to China Banking Regulatory Commission, there were 98 foreign banks (including subsidiaries) in Shanghai by the end of 2006, far more than the 37 in Beijing.
Fortunately, the listings of three large state-owned commercial banks and two state-controlled insurance groups have spiced up Beijing’s financial atmosphere. In fact, Beijing is home to headquarters of 10 of China’s 20 largest domestic commercial banks and four of China’s top six domestic insurance groups. Still, Beijing has surpassed Shanghai in terms of the total financial assets and bank deposits.
The GDPs of Shanghai and Beijing in 2006 amounted to almost US$134 billion and US$101 billion respectively, showing Shanghai has a stronger economic basis to develop its financial sectors. Although they are among the world’s fastest-developing cities, Beijing and Shanghai only ranked the 36th and 24th respectively in terms of comprehensive strength as financial centers. Shanghai has the largest Stock Exchange in China and offers superior human resources, business climate, market access and infrastructure.
Service sectors, among which finance stands at the high end, are replacing manufacturing as the economies of China’s larger cities continue to pick up momentum. That means bigger battles for financial resources.
This is an abstract of the report. Read the complete story: http://www.ceocio.com.cn/traffic/xprn/20070608.asp
Background:
China Business Feature (CBF) is powered by CEOCIO China magazine, a leading Chinese business and management publication. It is subordinate to International Data Group (IDG). When you click on CBfeature.com, you get the latest feature stories, updated every day, by more than 30 reporters and editors at CEOCIO China, as well as researchers from professional, independent organizations. The business features here are rooted in long-term, objective attention to the companies we explore and the people who run them. With a deep understanding of China’s business environment, our stories are focused on being relevant, practical and compelling. The information we provide can make a meaningful difference to your decision. CBF offers you valuable information to become a leading business player in China -- a player with a global mind and local eyes.
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