The Rise of China and Development of Financial Centres in Hong Kong, Beijing, Shanghai and Shenzhen

Abstract

As China's economy becomes more integrated with the world, several financial centres are expected to grow within the Chinese financial system. Hong Kong and Shanghai are unarguably the prime financial centres in China's economy, but Beijing and Shenzhen perform unique and irreplaceable functions in China's financial framework. This paper examines the strengths and competitiveness of Hong Kong, Beijing, Shanghai and Shenzhen through a wide range of market assessments in stock, bond, funds markets, futures and derivatives as well as the foreign exchange market and the presence of corporate headquarters to reveal how the development of financial centres in China relates to the rise of China's economy. The findings suggest that Hong Kong performs the role of an international financial centre in the Greater China region in terms of possessing highly internationalized financial industries and a sound legal environment, while Shanghai, Beijing and Shenzhen have strong points in domestic financial services and functions; together they not only represent the symbolic rise of China but also contribute to the fast growth of China and Asian economies.