14 June 2010
City assesses prospects for Shanghai International Board and
implications for business
The Shanghai International Board has an important role to play
in realising China's ambitions to become a major global financial
player, according to a new paper published today by the City of
London Corporation.
The research, conducted by Trusted Sources, suggests that
implementation of the Board will be a major step towards building a
more advanced Chinese financial system by providing the first
Mainland platform for international firms to issue shares, and the
only one to allow Mainland investors to freely buy and trade stock
in these firms. Hong Kong is currently the main international
destination for China-related investments. This addition to China’s
financial market architecture will contribute substantially to
Shanghai’s ambitions to develop as an international financial
centre.
While some uncertainties remain around the frame, scale and
scope (and timing) of the International Board, the authors have
identified some broad areas of opportunity in which City financial
services firms could benefit, including technical support on
international accounting standards, legal advice on listing
obligations across jurisdictions and underwriting opportunities for
foreign-invested securities firms. A number of City firms are also
expected to be among the first firms to be listed on the Board.
Stuart Fraser, Policy Chairman at the City of London
Corporation, said:
"China has been developing at a truly impressive pace over the
past decade but it does not yet have the international presence as
a financial player to match its position as the world's
third–largest economy.
The range of reforms and new products planned by the central
government and the Shanghai municipality – of which the Shanghai
International Board is a major part - will help to change this by
attracting more talented individuals and institutions to Shanghai,
which will bring the critical mass and expertise needed to
accelerate growth. Importantly, it will also give local investors
wider choice and access to investment opportunities in foreign
firms for the first time.
City firms have a longstanding presence in China, and are
well-positioned to participate in the Shanghai market and the
Shanghai International Board when it is developed. I look forward
to continuing to work closely with Shanghai as a member of Mayor
Han’s Shanghai International Financial Advisory Council, which will
meet in Shanghai next week."
The International Board will increase the investment options for
local investors and increase usage of the RMB by non-Chinese firms.
In the medium-term it is likely to increase competition within
China for future listings of leading Chinese companies and for
related financial services. The report explores the potential
challenges facing Hong Kong in particular, given its current
pre-eminence as an international venue for China-related
investments. Policy Chairman Stuart Fraser will be meeting policy
makers and financial sector leaders in Beijing and Shanghai during
his visit to China from 18 -27 June.
Ends
Notes to editors
- Download (from 14 June) a copy of The Shanghai International
Board – Opportunities and Challenges from
www.cityoflondon.gov.uk/researchpublications.
Before then available under embargo by email.
- About the City of London: The City of London
supports and promotes the Square Mile as a world leading
international financial and business centre and provides local
government and police services for workers, residents and visitors.
It also provides valued services to London and the nation as a
whole including management of Guildhall Art Gallery, the Barbican
Centre, the Central Criminal Court at Old Bailey, 4,240 hectares of
open space, three wholesale food markets and acts as London’s Port
Health Authority.
- About Stuart Fraser: Stuart Fraser is Chairman
of the Policy and Resources Committee of the City of London
Corporation. View his biography.
Download a
photo of Stuart Fraser
- About Trusted Sources: Trusted Sources
provides independent research into the political economies of
Brazil, Russia, India, China and their global market impact,
focusing on country risk and the investment opportunities stemming
from policy change. Its team of country analysts also delve into
the key sectors and themes which benefit and reflect the progress
of the domestic economy. www.trustedsources.co.uk
Press contact
Sanjay Odedra
Tel 020 7332 1835
Mob 07831 542 856
Email
sanjay.odedra@cityoflondon.gov.uk