Lujiazui Forum opens today: Shanghai wants to grow as an international financial center, Beijing has other plans

By Sue Ann Tay

The two-day Lujiazui Forum kicked off in Pudong this morning. This is Shanghai’s first high-level international finance forum that brings together influential government officials, financial leaders and scholars to discuss how to further the financial reform and market opening of China.

The gathering of Chinese and international financial glitterati is indeed impressive. People’s Bank of China Governor Zhou Xiaochuan opens the forum, with the first panel discussion involving China’s insurance, banking and securities regulators Wu Dingfu, Liu Mingkang and Shang Fulin respectively. Joining the conversation will be the heads of all the major international banks, securities officials of international stock exchanges and even a lunch keynote speech by David McCormick, Under Secretary of the US Treasury.

Shanghai officials hope to bring even more international awareness of Shanghai through the forum and gather ideas on how to better foster Shanghai’s reputation as a leading international financial center. When the blueprint for Lujiazui was introduced, planners had the idea that it would bloom into the next City of London.

No doubt people often think of Shanghai as the domestic financial center, but it looks like Beijing’s municipal government is trying to give Shanghai a run for its money. The Beijing government, in April, published a “guiding opinion” on the development of the financial sector in the city, which will grow around the core of Beijing’s Finance Street. Tianjin has been thrown in to the mix with its newly developed Binhai new area which aims to be another financial zone with the country’s first national over-the-counter stock exchange. Meanwhile, Shenzhen will be adding a new growth-enterprise board to its existing Shenzhen Stock Exchange.

Given that financial policy is largely dictated by the State Council, and the key regulating agencies headquartered in Beijing, most have argued that the seat of financial power really rests in Beijing. But then others counter that the Shanghai Stock Exchange resembles the beating heart of Chinese finance, much like Wall Street is for New York. This will be another dimension to the age-old Shanghai-Beijing rivalry and definitely a space that warrants further monitoring.