Excellent and thought-provoking article at Knowledge@Wharton, entitled, Turning Shanghai into a Global Financial Hub: So Much to Do, So Little Time. The article focuses on Shanghai’s public plans to become an International Financial Center by 2020 and debates whether that is going to happen:
While Shanghai might be big, can it be international? A new Goldman Sachs report titled, “Shanghai in 2020: Asia’s Financial Centre,” argues that although the city will gain in importance, it is more likely to “become a large domestic market rather than a broader regional market.”
But that’s not what city officials have in mind. They don’t want Shanghai to be like Tokyo or Seoul, both of which are impressive and vibrant cities at the hearts of their respective nations but aren’t — as Shanghai wants to be — at the absolute center of the global economy, whether in capital markets, trade or commerce.
For that to happen, Shanghai needs two things from the central government: The full convertibility of the RMB and the relaxation of controls allowing the free flow of currencies in and out of the country.
What do you think? Me, I don’t see Shanghai becoming a major financial center soon, nor even by 2020.