City's opening up providing opportunities
Shanghai is making further efforts to expand the opening up of financial markets and promote development of a global asset management center.
Investors and economists from home and abroad discussed the new opportunities for Chinese and foreign financial institutions at the annual Lujiazui Forum on Friday.
They also shared their views on how Shanghai can leverage its strengths in financial markets and financial institutions to attract capital faster and enhance its ability to allocate global financial resources.
Becoming a global asset management center is an important component of Shanghai’s endeavor to develop an international financial center. At present, the city boasts relatively complete financial factor markets featuring accelerated clustering of such asset management institutions as securities companies, fund managers, asset management companies and wealth management subsidiaries of bank from both home and abroad.
Richard Cantor, chief credit officer of Moody’s Corp, believed financial openness will boost economic growth.
Shanghai's measures on expanding opening up in the financial sector has been well implemented, and a lot of efforts have been made in the past year, including the lifting of foreign equity restrictions on several sectors including asset management, Cantor noted.
"This move is exciting for Moody’s,” Cantor said, with more foreign participation introducing more players into the market who will be familiar with the company’s services.
Shanghai is home to a large number of asset management agencies and the densest city for domestic insurance asset management companies, said Fu Fan, president of China Pacific Insurance (Group) Co.
"Facing the new situation of financial opening, frankly speaking, the domestic asset management institutions still have some deficiencies in risk control and system support compared with the international advanced counterparts," Fu said. "However, from the fundamental point of view, the domestic economy has sustained stable growth for a long term with increasing residents' income and more wealth accumulation, which makes the foundation of the domestic asset management business development more and more solid with vast development space."
As for the changes that further openness will bring to the financial sector, Mortimer Buckley, chairman and chief executive officer of Vanguard, said that "with the opening up of the markets, what we expect to happen and we hope to happen is increased competition.
"And with the increased competition, you will have more professional investors coming into the market, and the individual investors in China will benefit.”
In response to some people's concerns about stronger competition in the financial markets, especially the securities market, after the opening up of the capital markets, Peng Wensheng, chief economist of China International Capital Corporation, believed local institutions still hold advantages with a better understanding of local consumers and investors, and the opening up and increasing participation of foreign-funded institutions will stimulate local agencies to further promote efficiency and proficiency.
Andrew Komaroff, chief operating officer of Neuberger Berman Group, also believed competition will be very healthy for the industry and drive innovation, and ultimately will benefit and inspire the financial sector.