City sets out global asset management goal

Huang Yixuan
Local government directives aimed at making Shanghai an important hub for asset management in Asia, and bring it to the forefront of global asset management center cities.
Huang Yixuan

Shanghai is to speed up construction of a global asset management center, for which the city government issued a series of directives on May 17.

It sets the goal of making Shanghai an integrated and open asset management center with high concentration of factors, high level of internationalization and relatively complete ecological system.

The measures to foster the asset management industry include optimizing the system of institutions, innovating products and services, fulfilling the functions of financial market, promoting internationalization, enhancing talent introduction and cultivation, and improving comprehensive service capacity.

"We aim to build the city into an important hub for asset management in Asia, and bring it to the forefront of global asset management center cities," according to the local financial regulatory bureau.

By the end of 2020, Shanghai had 1,674 licensed financial institutions (a third of which were foreign-funded), with an annual turnover of over 2,270 trillion yuan (US$354 trillion). 

The city took the lead in setting up institutions such as the financial court, the Court of Financial Arbitration, the Financial Consumer Protection Bureau, and the financial dispute mediation center, becoming one of regions with the best environment for financial development in the country.

It maintained the position as a top financial hub only behind New York and London in the latest Global Financial Centers Index report released in March by the China Development Institute in Shenzhen and Z/Yen Partners, a London-based market research company.

The report highlighted Shanghai's efforts to appeal to talent.

"The availability of skilled people and flexibility of the labor markets is a major consideration when global asset management companies choose their branch location. Shanghai is working hard to attract talented professionals by providing a preferential taxation policy and a settled city policy," it said.

According to the new directives, the city pledges to further facilitate affairs for overseas talent, such as applying for professional certificates, permanent residence and talent apartments.

Smoothing cross-border investment is also one of the key tasks mentioned.

Openness is a major advantage for Shanghai in the development as a global asset management center, the bureau said, making it the top destination for foreign asset management companies when entering China.

Of the world's top 20 international asset management institutions, 17 have been doing business in Shanghai. The city is now home to 29 of the 33 foreign private equity managers registered at the Asset Management Association of China.

According to the document, local authorities will further push ahead the pilot programs of both QFLP (Qualified Foreign Limited Partner) and GDLP (Qualified Domestic Limited Partner) schemes.

Institutions in the pilot programs are encouraged to set up global or regional management centers in the city and to carry out cross-border two-way investment management, it said.

The city is also putting great store in innovations in products and services.

For example, special policies will be formulated to bolster the pilot program of real estate investment trusts, or REITs.

It will also support financial institutions including banks, fund and securities companies to apply for investment advisory qualification, and encourage asset management institutions to participate in the management of basic pension funds, enterprise annuities and occupational annuities.

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