More land to turn Shanghai into global financial hub
Shanghai has pledged more land for the development of its financial sector to bolster its ambition to become an international finance hub.
According to a draft rule published by the city's legislature yesterday, land authorities and district-level governments will be required to give priority to the financial sector when they draw up annual land-use plans.
The city government will also conduct building-swap deals and resort to other administrative measures to meet the rising demand for office space in the city's financial zones.
The rule, aimed at developing the city into a global financial centre by 2020, is viewed by economists as a precursor to further drastic market liberalisations on the mainland.
The rule also included some generalities on financial innovation and co-operation with Hong Kong.
'The city will deepen co-operation with the Hong Kong Special Administrative Region in terms of financial-product innovation, control of financial risks and the nurturing of financial talent,' it said.
The Shanghai People's Congress said it would solicit public opinion on the rule until April 20.
The draft rule followed high-profile guidelines released by the State Council last week, under which the central government vowed to help Shanghai evolve into a global financial and shipping hub by 2020.
HSBC China chief executive Richard Yorke said: 'We believe that this process will help deepen financial reforms and facilitate the building of a more prudent financial system, benefiting the country and all financial institutions for the long term.'
Pan Yingli, a professor of finance at Shanghai Jiao Tong University, said land and taxes were the two key parts of the effort to build up a financial centre, adding that foreign institutions would not gravitate to Shanghai unless the city established zones where big-name companies could cluster.
The city government had also promised to set up a fund to attract more talent and encourage market liberalisation, the rule said.
Shanghai now has two major financial zones - Lujiazui and the Bund - home to big-name financial institutions' China headquarters and local branches. In the rule, the city also said the Zhangjiang hi-tech zone and Yangshan port would reinforce the future growth of Shanghai's financial sector. It did not elaborate.
Analysts said the ambitious plan for Shanghai would not live up to its promise unless Beijing made the yuan fully convertible. It is widely believed that the central government has set 2020 as the deadline for full convertibility.
Shanghai has also lobbied the central government to slash personal income tax for professionals in the financial sector.