Shanghai ranks 6th among financial hubs

Shanghai remains the world's sixth most influential financial center, according to a new index of 45 cities, while Beijing and Shenzhen have enjoyed healthy moves up the rankings.

According to the third Xinhua-Dow Jones International Financial Centers Development Index, Shanghai has made significant improvements in the services it provides, and in the regulatory conditions it has in place.

Beijing moved up three spots to 11th place on the list, while Shenzhen moved up two spots to 19th, the first time the southern city has been included in world's top 20.

An accompanying report with the index said that while European financial centers were severely impacted by the ongoing sovereign debt crisis, financial centers in Asia have gained increased influence as a result.

The traditional financial powerhouses of New York, London and Tokyo hold the top three spots, as they did last year, followed by Hong Kong and Singapore.

Peter Roffman, vice-president of Standard & Poor's, said he believed that the results clearly reflect Shanghai's growing influence in financial services, and China's overall economic global strength.

Jiao Ran, director of the economic information department at Xinhua, said "the city has shown a commitment to the sustained growth of its financial services industries", making significant improvements in services and regulations in recent years, which have all helped build its global reputation.

He added that there are strong indications that the gaps between the world's top financial centers are narrowing, making competition among the top destinations keener than ever.

Among the financial centers of the BRIC (Brazil, Russia, India and China) countries, Shanghai ranks top in various indicators, including appeal to investors, talent, innovation, and convenience.

The report said that as some financial markets have suffered, so the conditions important to customers within them have changed too.

Inevitably, some key European financial centers have seen their rankings drop, reflecting their ongoing troubles.

The index was certainly comprehensive in its coverage: 66 different indicators were considered, and 3,016 questionnaires sent out.

The indicator system rated the international financial centers on five key aspects - financial markets, growth and development, industrial support, services and their general business environment.

Other cities on the top 10 are Paris, Frankfurt, Zurich and Chicago.

Chicago moved into the top 10 for the first time, driven by its growing reputation for services, and its business environment.

Pan Yingli, a finance professor at Shanghai Jiao Tong University, said top financial centers such as New York, London and Hong Kong have a long tradition of providing quality financial services, and still have resources that Shanghai lacks and will not be able to gather in the short term.

However, he noted that Shanghai's future as a financial center is bright, driven by decision makers willing to introduce policies aimed at boosting the city's reputation.

He added that Shanghai still needs a more mature regulatory structure, better services, more incentives for innovation, and further appeal to investors, particularly in high-end financial products and services.

But Pan said Shanghai's close ties with Hong Kong, in areas such as issuing private placement bonds and foreign exchange products, give it a strong advantage.