Shanghai exchanges hostilities

WHEN Daimler-Benz, Germany's biggest car-maker, recently announced that it would give Hong Kong a miss and opt for a listing in Shanghai it was a sign of bigger things to come for the mainland city zealously trying to restore its role as China's Wall Street and an Asia-Pacific powerhouse.

True, Daimler chairman Edzard Reuter made no bones about the decision being more an act of faith in China's rapidly developing economy than a response to Shanghai's fund-raising ability.

Chief financial officer Gerhard Liener added: ''We don't intend to go to Hong Kong because if you want to go to China, you have two alternatives - Hong Kong or Shanghai. These are two centres in competition . . . we don't want to overdo things.'' Shanghai right now is not quite the competitor to Hong Kong which Mr Liener has made it out to be.

Nonetheless, he has succinctly captured the sentiment of a small but growing number of investors and financiers who are betting on Shanghai's emergence as China's Wall Street, and taking some international business from Hong Kong.

Just four years ago many would have scoffed at the idea of Shanghai becoming a threat to the territory.

Today, an increasing number of financiers say the mainland city has come a long way and is poised to give the territory a run for its money in the next 10 years.

Nothing illustrates the potential competition more clearly than the increasing number of foreign firms and financial institutions finding it necessary to have a presence in Shanghai.