Shanghai commits to becoming a global asset management center, forum heard

The 2023 Shanghai Global Asset Management Forum concluded on Friday, as the first event of the city's annual "Global Asset Management Center – Shanghai International Events Week" campaign.

The two-day forum, co-hosted by media agency Yicai and Bank of China, brought together over 80 distinguished speakers from regulatory agencies, research institutions, globally-renowned asset management institutions, leading domestic asset management institutions, financial infrastructure, and asset management industry associations.

With a program featuring over 10 keynote speeches and 11 roundtable discussions, a comprehensive range of topics will be addressed, including the construction of the asset management industry, high-level opening-up, green finance, pension finance, philanthropic finance, technology finance, public REITs development, and asset management industry services for the real economy.

These discussions are aimed at promoting the high-quality development of the asset management industry and establishing an international platform that serves the needs of the real economy.

Shanghai, with its commitment to becoming a global asset management center, has made remarkable strides over the past three years. The city has emerged as one of the most comprehensive financial market systems in the world, encompassing stocks, bonds, currencies, foreign exchange, gold, futures, bills, and insurance.

Shanghai Vice Mayor Xie Dong in her opening speech acknowledged the significance of Shanghai's role as a global asset management center. She affirmed that it's not only vital for expanding the city's global resource allocation capabilities but also a strategic imperative for serving the real economy. "Shanghai is determined to accelerate the establishment of functional platforms that foster international connectivity, thereby leading cross-border investments and data flows," Xie said.

In recent years, Shanghai's remarkable openness and interconnectedness have played a fundamental role in positioning the city as a global asset management hub. The financial industry's accelerated opening-up in China has witnessed significant relaxation of market access restrictions in sectors such as banking, securities, fund management, futures, and life insurance.

Initiatives like the Shanghai-Hong Kong Stock Connect, Shanghai-London Stock Connect, Bond Connect, Qualified Foreign Institutional Investor (QFII), and Renminbi Qualified Foreign Institutional Investor (RQFII) programs have further promoted cross-border securities market interconnectivity.

The city's global appeal to asset management institutions is evident. "Currently, all six newly established wholly foreign-owned public funds in China are based in Shanghai. The city also hosts five joint-venture bank wealth management companies, the majority of foreign private securities investment fund managers registered with the Asset Management Association of China, and a significant number of internationally renowned asset management institutions participating in the Shanghai Qualified Foreign Limited Partner (QFLP) and Qualified Domestic Limited Partner (QDLP) pilot programs," Xie noted.

Foreign asset management institutions have shown a keen interest in Shanghai, with 17 out of the top 20 global international asset management institutions establishing operations in the city. Additionally, among the 33 foreign private securities investment fund managers registered with the Asset Management Association of China, 29 have chosen Shanghai as their base of operations. Furthermore, Shanghai is home to a total of 1,736 licensed financial institutions, including 539 foreign-funded institutions, accounting for nearly one-third of the city's financial landscape.

Meanwhile, integration with the internationalization of the renminbi is crucial for the asset management industry's future development, as Liu Jin, president of the Bank of China, emphasized. The renminbi's increasing prominence in cross-border use for international payments and reserves presents a significant opportunity for asset management institutions to establish a cross-border renminbi product system that can attract and retain foreign funds.

The establishment of an integrated payment, settlement, clearing, and custody system, along with improved convenience for foreign investors to access the domestic market, are initiatives being taken to nurture the growth of Shanghai's asset management industry, Liu noted.

The Shanghai Regulatory Bureau of the China Securities Regulatory Commission pledged that in the next step, it "will adhere to the directions of marketization, legalization, and internationalization, continuously strengthen the supervision of securities and fund management businesses, better serve the operation and development of securities and fund management institutions in the city, strive to create a good market order and a legal and trustworthy environment, and safeguard the legitimate rights and interests of investors," said Liu Bin, deputy director of the Shanghai Bureau of CSRC.

Liu Xingya, deputy head of the Shanghai Headquarters of the People's Bank of China, provided five recommendations for the construction of Shanghai's global asset management center. These include actively supporting the establishment of an international financial asset trading platform in Shanghai, exploring convenient and efficient ways to manage cross-border capital flows, continuing to support the enhancement of renminbi asset allocation and risk management functions, continuing to promote the QFLP and QDLP pilot programs, and strengthening the monitoring of domestic and foreign currency and cross-border capital flows.

Also at the forum, two influential reports, namely the "2023 Shanghai Global Asset Management Center Construction Report" and the "Shanghai Guidebook for Overseas Asset Managers (2023)" were officially released, providing critical insights into the progress of building the global asset management center in Shanghai.