Chengdu Financial City looks to City of London for inspiration
With the future of 15 million people and millions of businesses at stake, chairman says he’s happy to spend 20 years developing western China’s new financial centre
Chengdu Financial City is hoping to find its inspiration to become western China’s financial centre from the City of London, according to its chairman Fang Zhao.
The state firm, wholly owned by Chengdu Municipal government, is responsible for city planning, land and infrastructure preparation of the 5.1 square kilometre mini-city in southern Chengdu.
“Globally we drew inspiration from London, Dubai and other cities. We plan to visit the City of London this year,” said Fang, the chairman of Chengdu Financial City Investment & Development.
Nationally, Beijing and Shanghai have firmly established their positions as the country’s financial centres.
But now battle lines are being drawn among China’s second-tier cities, as at least 25 cities have targeted becoming “regional financial centres”.
The competition is overwhelming, with each city stressing its own advantages to snare some policy specials from the central government.
So who stands out from the crowd comes down to which city has the clearest vision, the deepest understanding of the industry, and the ability to implement it.
Like its peers, Chengdu Financial City does not target profit maximisation. Development of the cities nationally is closely aligned with the industrial policies of each local government.
Most times they stay low-profile, seldom giving interviews to the media. But the cities matter, not only because they hold vast tracts of land, virtually a city’s worth, but also because they are central to understanding China’s political economic landscape, driven by market forces and government manoeuvring.
Given the weight of such corporations, it is the vision and strategy of a company’s leader that well may decide whether a city fulfils its target.
At stake is a city of 15 million people and millions of businesses.
Fang is frank about his company’s similarities with counterparts in other second-tier cities.
But he is confident Chengdu has what it takes because of its fundamentals, and the leadership’s ability to “think longer”.
Chengdu Financial City plans to avoid the blunders made in other cities, whose “financial centre” ambitions led them to think they could differentiate themselves with blind pursuits of “in vogue” companies. Fang said he has the “patience” to wait for its “feature list” to grow rather than grabbing at features now.
“If developed ruthlessly, the city could grow to be fully-fledged within five to eight years. But we decided to grow a bit slower and reserve room for the future,” he said.
This means the city is taking a 20-year perspective on development and is willing to leave considerable portions of the land undeveloped, even if that affects short-term cash flow.
This approach is based on Fang’s philosophy that in the face of a future rife with uncertainties, it is difficult to predict what changes technology will bring to the finance industry. If the city embraces the hot companies of the moment and rushes to sell or lease all its space, emerging industries will be left out and the city will become “rigid”, he said.
“The City of London is just one square mile so demand far exceeds space. The city had to open another district to accommodate its needs. We have to learn from that,” Fang said.
That does not mean the city has done away with short-term goals. Fang said the city was still eyeing traditional and emerging finance, such as internet finance companies, financial leasing firms, and venture capital firms.