China to build Pudong into global financial hub on par with London, Manhattan

The Pudong New Area of Shanghai will rival the city of London and Manhattan in the financial sector as China moves to model the area into a pioneer zone for socialist modernization in the coming years, officials said on Thursday during a press conference in Shanghai.

As policy supports for Pudong continue to increase, experts are looking forward to the construction of a global hub for the yuan’s offshore transactions in the area, which will further promote the currency’s internationalization and help attract more multinational enterprises to set up headquarters in Pudong.

The Pudong New Area will seek to compete with and rival the world’s best examples in terms of constructing the pilot free trade zone, the international science and technology innovation center, the international financial center, and the international consumption center, said Weng Zuliang, Party chief of the Pudong New Area, at the press conference.

In terms of finance, Pudong will seek to rival the city of London and Manhattan in New York, and in particular strive to become a global hub for the yuan’s offshore transactions, Weng said.

To reach this goal, Pudong will roll out internationally oriented yuan financial products, expand the scope of overseas yuan-denominated domestic investment financial products, promote the cross-border, two-way flow of yuan funds, and carry out pilot trading of yuan foreign exchange futures, as planned by the central government.

The construction of a global hub for the yuan’s offshore transactions in Pudong will promote the internationalization of the currency, Shi Jianxun, an economics professor at the School of Economics and Management of Tongji University in Shanghai, told the Global Times on Thursday.

“It means yuan-denominated funds from Pudong can invest in Hong Kong or overseas markets directly, while offshore yuan can flow into Pudong freely in the future,” Shi said.

The yuan’s offshore market has already reached a certain scale in London and Hong Kong, and construction of the yuan offshore market in the Chinese mainland will further smooth these channels and facilitate offshore yuan to come to China for deposits, loans and investment, Dong Dengxin, director of the Finance and Securities Institute of Wuhan University, told the Global Times on Thursday.

“This is expected to improve the status of the yuan, improve the efficiency of fund use, and promote the internationalization of the yuan,” Dong said.

In order to build Pudong into a core international financial center that can rival the city of London and Manhattan, Pudong needs to further improve the financial infrastructure and operations of the offshore market, he added.

In the first half of the year, Pudong’s GDP grew by 13.7 percent year-on-year, and the area attracted more than $5 billion in foreign investment, with 14 newly added regional headquarters of multinational companies and 15 licensed financial institutions.

To better attract global investors, Pudong is mulling a couple of action plans, including a global operations program to help multinational corporations registered in Pudong expand their business scope and coverage from China to the Asia-Pacific, and even the entire world.

Since the end of last year, the first 41 enterprises that decided to participate in the global operations program have seen their business volume expand by more than 40 percent. Another 52 enterprises are set to follow.

With this project, enterprises in Pudong can make full use of and integrate international and domestic market resources, and they can play a better leading role in the dual circulation development strategy, Shi said.

As far as Pudong and Shanghai are concerned, if many large, leading global enterprises settle in Pudong, it will greatly consolidate Shanghai’s role as an international economic center and enhance Shanghai’s international competitiveness and influence, he added.

Jessie, a financial services practitioner based in Pudong, told the Global Times on Thursday that she was looking forward to the action plans.

“While global capital is increasingly seeking platforms to invest in China, domestic wealth management institutions are expecting attractive investment and risk-control instruments for long-term returns,” she said.

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