London Daily

Focus on the big picture.
Friday, Oct 03, 2025

Shanghai has a long way to go before it can claim to be a global financial centre, says European business group

Only removal of capital controls and renminbi convertibility can help Shanghai claim title of international financial centre, says Thilo L. Zimmermann of European Union Chamber of Commerce in China
Strict capital controls, lack of yuan convertibility and ongoing regulatory issues pose a serious threat to the Chinese government’s stated goal of turning Shanghai into a global financial centre by 2020, according to the European Union Chamber of Commerce in China.

A study by the chamber found that almost nine out of 10 members felt Shanghai’s banking and finance market was too regulated compared to other international financial centres, and that has hindered their growth in the mainland.

“Only removal of capital controls and renminbi convertibility can bestow the title of international financial centre upon Shanghai,” said Thilo L. Zimmermann, vice-chairman of the chamber’s banking and securities committee.

In the past few years, Chinese authorities have taken a slew of measures and reforms to open up the country’s economy and boost Shanghai’s appeal. These include removing ownership caps on futures, securities and fund management companies, launching the London-Shanghai Stock Connect and allowing foreign rating agencies to operate in the domestic market.

However, the chamber has called for more practical details and support for foreign financial institutions to ease their entry into the market.

In March 2009, the State Council, China’s cabinet, set a goal to establish Shanghai as an global financial centre by 2020.

“Although Shanghai has certainly moved towards its goal of becoming an international financial centre, it is just not here yet,” said Carlo D’Andrea, chairman of the chamber’s Shanghai chapter.

Another board member of the chamber said that the mindset here in Shanghai was much more regulatory influenced than Hong Kong.

The member, who did not want to be named, explained that although the stock exchange in Shanghai was larger and better organised than Hong Kong, Hong Kong was easier to work with from a regulatory perspective.

“The government should really try to combine Shanghai and Hong Kong, not make them competitors,” he added.

Volatile equity markets, rising risk of bond defaults and underdeveloped post bond default legal process have all increased the risk of financial activities in Shanghai.

None of the surveyed executives said that equities are accurately priced in China, while only 12 per cent believe that corporate credit in China is accurately priced.

According to rating agency Fitch, a lot of onshore bond defaults have yet to be resolved.

Nearly 30 per cent of the issuers that have defaulted on debt between 2014 and November 2019 have not entered into any bankruptcy process or made repayments, while there is very limited information on the post-default status of another 23 per cent, it said.
Newsletter

Related Articles

0:00
0:00
Close
Trump Administration Launches “TrumpRx” Plan to Enable Direct Drug Sales at Deep Discounts
Trump Announces Intention to Impose 100 Percent Tariff on Foreign-Made Films
Altman Says GPT-5 Already Outpaces Him, Warns AI Could Automate 40% of Work
Singapore and Hong Kong Vie to Dominate Asia’s Rising Gold Trade
Trump Organization Teams with Saudi Developer on $1 Billion Trump Plaza in Jeddah
Manhattan Sees Surge in Office-to-Housing Conversions, Highest Since 2008
Switzerland and U.S. Issue Joint Assurance Against Currency Manipulation
Electronic Arts to Be Taken Private in Historic $55 Billion Buyout
Thomas Jacob Sanford Named as Suspect in Deadly Michigan Church Shooting and Arson
Russian Research Vessel 'Yantar' Tracked Mapping Europe’s Subsea Cables, Raising Security Alarms
New York Man Arrested After On-Air Confession to 2017 Parents’ Murders
U.S. Defense Chief Orders Sudden Summit of Hundreds of Generals and Admirals
Global Cruise Industry Posts Dramatic Comeback with 34.6 Million Passengers in 2024
Trump Claims FBI Planted 274 Agents at Capitol Riot, Citing Unverified Reports
India: Internet Suspended in Bareilly Amid Communal Clashes Between Muslims and Hindus
Supreme Court Extends Freeze on Nearly $5 Billion in U.S. Foreign Aid at Trump’s Request
Archaeologists Recover Statues and Temples from 2,000-Year-Old Sunken City off Alexandria
China Deploys 2,000 Workers to Spain to Build Major EV Battery Factory, Raising European Dependence
Speed Takes Over: How Drive-Through Coffee Chains Are Rewriting U.S. Coffee Culture
U.S. Demands Brussels Scrutinize Digital Rules to Prevent Bias Against American Tech
Ringo Starr Champions Enduring Beatles Legacy While Debuting Las Vegas Art Show
Private Equity’s Fundraising Surge Triggers Concern of European Market Shake-Out
Colombian President Petro Vows to Mobilize Volunteers for Gaza and Joins List of Fighters
FBI Removes Agents Who Kneeled at 2020 Protest, Citing Breach of Professional Conduct
Trump Alleges ‘Triple Sabotage’ at United Nations After Escalator and Teleprompter Failures
Shock in France: 5 Years in Prison for Former President Nicolas Sarkozy
Tokyo’s Jimbōchō Named World’s Coolest Neighbourhood for 2025
European Officials Fear Trump May Shift Blame for Ukraine War onto EU
BNP Paribas Abandons Ban on 'Controversial Weapons' Financing Amid Europe’s Defence Push
Typhoon Ragasa Leaves Trail of Destruction Across East Asia Before Making Landfall in China
The Personality Rights Challenge in India’s AI Era
Big Banks Rebuild in Hong Kong as Deal Volume Surges
Italy Considers Freezing Retirement Age at 67 to Avert Scheduled Hike
Italian City to Impose Tax on Visiting Dogs Starting in 2026
Arnault Denounces Proposed Wealth Tax as Threat to French Economy
Study Finds No Safe Level of Alcohol for Dementia Risk
Denmark Investigates Drone Incursion, Does Not Rule Out Russian Involvement
Lilly CEO Warns UK Is ‘Worst Country in Europe’ for Drug Prices, Pulls Back Investment
Nigel Farage Emerges as Central Force in British Politics with Reform UK Surge
Disney Reinstates ‘Jimmy Kimmel Live!’ after Six-Day Suspension over Charlie Kirk Comments
U.S. Prosecutors Move to Break Up Google’s Advertising Monopoly
Nvidia Pledges Up to $100 Billion Investment in OpenAI to Power Massive AI Data Center Build-Out
U.S. Signals ‘Large and Forceful’ Support for Argentina Amid Market Turmoil
Nvidia and Abu Dhabi’s TII Launch First AI-&-Robotics Lab in the Middle East
Vietnam Faces Up to $25 Billion Export Loss as U.S. Tariffs Bite
Europe Signals Stronger Support for Taiwan at Major Taipei Defence Show
Indonesia Court Upholds Military Law Amid Concerns Over Expanded Civilian Role
Larry Ellison, Michael Dell and Rupert Murdoch Join Trump-Backed Bid to Take Over TikTok
Trump and Musk Reunite Publicly for First Time Since Fallout at Kirk Memorial
Vietnam Closes 86 Million Untouched Bank Accounts Over Biometric ID Rules
×