Shanghai sets out plan for development as an international financial center

Shanghai has set a goal of significantly upgrading its expertise as an international financial center by 2025 and further strengthening its role in serving the high-quality development of the Chinese economy.

The city's government on Tuesday introduced a new plan for the development of Shanghai as an international financial center during the 14th Five-Year Plan (2021-2025).

By 2020, Shanghai had established itself as an international financial center in line with China's economic strength and the international status of the yuan, laying a solid foundation for further development, said Wu Qing, the city's vice mayor.

Official data showed that as of the end of 2020, the total capitalization of shares listed on the Shanghai Stock Exchange ranked third in the world, while initial public offerings last year saw the funds raised and the overall turnover ranking first and fifth globally.

The scale of the interbank bond market in the city ranked second globally, and the Shanghai Gold Exchange led world bourses in spot gold trading on exchange.

The turnover of Shanghai's financial markets in 2020 was 2.27 quadrillion yuan (US$416.9 trillion), surging 55.5 percent from 2015, while the amount of direct financing rocketed 91.3 percent from 2015 to 17.6 trillion yuan.

The city also aims to consolidate its central position in yuan financial asset allocation and risk management and enhance its global resource allocation function, to lay a solid foundation for developing as an international financial center of global significance by 2035.

The city set out six specific goals: to enhance the development of "two centers" – a global asset management center and a financial technology center; to consolidate the position of "two hubs" – an international green financial hub and a hub for the cross-border use of the yuan; and to establish "two highlands" – for international financial talent and the financial business environment.

Total trading volume in the city's financial markets is targeted to grow to about 2.8 quadrillion yuan in 2025, while the scale of direct financing is expected to reach about 26 trillion yuan – more than 85 percent of the national total.

The city also expects to see the cumulative issuance of panda bonds (yuan-denominated bonds from non-Chinese issuers) reach 700 billion yuan by 2025, and hopes to become home to around 50 leading fintech enterprises.

"We hope to see 'Shanghai prices,' including yuan-dominated financial assets and major commodities, have greater acceptance and influence in the international market," Wu said.

Among the key tasks and measures during the five-year period, Shanghai will optimize the financial service system and enhance the city's ability to serve sci-tech innovation as well as the real economy.

And special financial support will be offered to key fields and industries.

It will also deepen financial reform and innovation and optimize the financial market, product, institutional and infrastructure systems.

High-level opening up in the financial sector will be further expanded, with more pilot programs and trials of new policies and measures to be launched first in the China (Shanghai) Pilot Free Trade Zone and the Lingang Special Area.

The city also bets on the digital transformation in the financial industry, the development of green finance, the mechanism to cultivate and attract talents, the construction of a risk management system aligned with openness and innovation, and the optimization of the financial business environment.