International Financial Centre Comparison
International Financial Centre Comparison
Hong Kong and Shanghai
Both Shanghai and Hong Kong are ranked in the top five global financial centre according to GFCI, 2011[1]. Shanghai keeps up with Hong Kong in finance field in the recent years. We pick up four criteria including diversity of financial products, availability of qualified staff, taxation of capital gains and local currency convertibility to compare Hong Kong and Shanghai.
Diversity of financial products
The diversities of financial products reflect the competitiveness of financial centre. Only with various financial products, investors can make different portfolios to hedge risks or speculate. With more financial derivatives, the financial industry will be boosted as well.
At present, the financial products in Shanghai mainly include stocks, commodity futures, CDs, commercial papers, stock funds, trust funds and some derivatives related to foreign exchange rate or metal prices. In 2009, the Growth Enterprise Market was launched in the stock exchange of Shenzhen. In April, 2010, stock index futures firstly came to the market in Mainland China. I see the two events above as the most innovative things during the past five in the financial markets in Mainland China. Though the volume of financial products sold in the banks was about 8.5T RMB by August, 2011, the sorts of financial products were very limited. And we should keep in mind the background is high inflation continuously. However, these products concentrated more on the profit style of giving loan and earning higher interest than basic bank interest rate.
Some numbers are listed in the following part. Number of securitized derivatives in Hong Kong Exchanges was 6578 by January, 2011[2]. In Shanghai SE, the number of securitized derivatives is quite limited in contrast. The number of ETFs in Hong Kong Exchange, Shanghai SE and Shenzhen SE was 72, 14 and 4 respectively by January, 2011[3]. Hence, a large gap exists between HK and SH
Hong Kong and Shanghai
Both Shanghai and Hong Kong are ranked in the top five global financial centre according to GFCI, 2011[1]. Shanghai keeps up with Hong Kong in finance field in the recent years. We pick up four criteria including diversity of financial products, availability of qualified staff, taxation of capital gains and local currency convertibility to compare Hong Kong and Shanghai.
Diversity of financial products
The diversities of financial products reflect the competitiveness of financial centre. Only with various financial products, investors can make different portfolios to hedge risks or speculate. With more financial derivatives, the financial industry will be boosted as well.
At present, the financial products in Shanghai mainly include stocks, commodity futures, CDs, commercial papers, stock funds, trust funds and some derivatives related to foreign exchange rate or metal prices. In 2009, the Growth Enterprise Market was launched in the stock exchange of Shenzhen. In April, 2010, stock index futures firstly came to the market in Mainland China. I see the two events above as the most innovative things during the past five in the financial markets in Mainland China. Though the volume of financial products sold in the banks was about 8.5T RMB by August, 2011, the sorts of financial products were very limited. And we should keep in mind the background is high inflation continuously. However, these products concentrated more on the profit style of giving loan and earning higher interest than basic bank interest rate.
Some numbers are listed in the following part. Number of securitized derivatives in Hong Kong Exchanges was 6578 by January, 2011[2]. In Shanghai SE, the number of securitized derivatives is quite limited in contrast. The number of ETFs in Hong Kong Exchange, Shanghai SE and Shenzhen SE was 72, 14 and 4 respectively by January, 2011[3]. Hence, a large gap exists between HK and SH