Shanghai Aims to Become International Finance and Shipping Center
The State Council is expected to approve Shanghai’s proposal to turn itself into global economic hub.
Chenzhong Xiaolu, Caijing 24 March 2009
Shanghai’s bid to become an international finance and shipping center has gotten informal nods from the State Council and is expected to be officially approved soon, according to a source close to the Shanghai government.
The proposal is currently going through routine reviews by different government offices, and “should be approved within weeks,” the source said.
Submitted in 2008 by the Shanghai Municipal Development and Reform Commission, the proposal outlines policies that support Shanghai’s finance and shipping markets, specifying issues such as government financing, stimulus measures and deregulation in finance, shipping, and related sectors.
Regarding the development of a financial center, the plan aims to establish finance laws, a taxation system, a credit system and a supervisory system that both work for China and comply with international standards. The proposal advocates speeding up the development of a bond market as well as financial derivatives and futures, including more industries in the stock market and building a stock market transfer procedure. Should the proposal pass, Shanghai also will permit foreign enterprises to issue RMB bonds and stocks on Shanghai exchanges and will allow exchange traded funds linked to Hong Kong stocks to list on the ETF market.
Shipping center policies include improving traffic in Shanghai, developing a modern shipping system and providing tax cuts to related service industries. The plan seeks to increase oil shipments, while also encouraging foreign investment in the shipping sector by reducing investment fees. Among these policies, the key ideas are building an experimental shipping area at Yangshan Port, allowing foreign-registered ships to also register in China, and lowering domestic tariffs for outbound Chinese exports.
Shanghai mayor Han Zheng announced during the National People’s Congress and Chinese People’s Political Consultative Conference this year that Shanghai has generated new ideas and measures to supplement these policies.
According to another source close to the city government, Shanghai must develop a more advanced modern service sector and manufacturing industry, as earlier manufacturing industries gradually moved to Jiangsu province and nearby regions.
“If Shanghai does not develop a modern service industry and an advanced manufacturing industry, it will face an economic hollowing out and its development will rely solely on capital investments, such as in the stock market and real estate, which is very dangerous,” said the source.
Although the policy content has not been published yet, a source close to decision makers said that the coming policies would be a limited improvement over previous policies. One government official said that even with these supportive policies, Shanghai still has a long way to go before achieving a modern service industry.
Years ago, Shanghai set the goal of becoming a leader in international economy, trade, finance, and shipping. In recent years, however, the government began focusing on the latter two, and hopes that the shipping sector will promote the development of its finance industry.
“Shanghai is seeking more supportive policies from the central government for its finance and shipping sectors during the financial crisis,” said a Shanghai government-related source.
An expert on Shanghai decision makers said that some state government offices initially objected to the proposal because they thought it was “going too far.” Secretary of the Shanghai Party committee Yu Zhengsheng said during the NPC and CPPCC that relevant central government officials believe the plan is reasonable and asked the State Council and related state offices to give their support.
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Shanghai Aims to Become International Finance and Shipping Center
The State Council is expected to approve Shanghai’s proposal to turn itself into global economic hub.
Chenzhong Xiaolu, Caijing
24 March 2009
Shanghai’s bid to become an international finance and shipping center has gotten informal nods from the State Council and is expected to be officially approved soon, according to a source close to the Shanghai government.
The proposal is currently going through routine reviews by different government offices, and “should be approved within weeks,” the source said.
Submitted in 2008 by the Shanghai Municipal Development and Reform Commission, the proposal outlines policies that support Shanghai’s finance and shipping markets, specifying issues such as government financing, stimulus measures and deregulation in finance, shipping, and related sectors.
Regarding the development of a financial center, the plan aims to establish finance laws, a taxation system, a credit system and a supervisory system that both work for China and comply with international standards. The proposal advocates speeding up the development of a bond market as well as financial derivatives and futures, including more industries in the stock market and building a stock market transfer procedure. Should the proposal pass, Shanghai also will permit foreign enterprises to issue RMB bonds and stocks on Shanghai exchanges and will allow exchange traded funds linked to Hong Kong stocks to list on the ETF market.
Shipping center policies include improving traffic in Shanghai, developing a modern shipping system and providing tax cuts to related service industries. The plan seeks to increase oil shipments, while also encouraging foreign investment in the shipping sector by reducing investment fees. Among these policies, the key ideas are building an experimental shipping area at Yangshan Port, allowing foreign-registered ships to also register in China, and lowering domestic tariffs for outbound Chinese exports.
Shanghai mayor Han Zheng announced during the National People’s Congress and Chinese People’s Political Consultative Conference this year that Shanghai has generated new ideas and measures to supplement these policies.
According to another source close to the city government, Shanghai must develop a more advanced modern service sector and manufacturing industry, as earlier manufacturing industries gradually moved to Jiangsu province and nearby regions.
“If Shanghai does not develop a modern service industry and an advanced manufacturing industry, it will face an economic hollowing out and its development will rely solely on capital investments, such as in the stock market and real estate, which is very dangerous,” said the source.
Although the policy content has not been published yet, a source close to decision makers said that the coming policies would be a limited improvement over previous policies. One government official said that even with these supportive policies, Shanghai still has a long way to go before achieving a modern service industry.
Years ago, Shanghai set the goal of becoming a leader in international economy, trade, finance, and shipping. In recent years, however, the government began focusing on the latter two, and hopes that the shipping sector will promote the development of its finance industry.
“Shanghai is seeking more supportive policies from the central government for its finance and shipping sectors during the financial crisis,” said a Shanghai government-related source.
An expert on Shanghai decision makers said that some state government offices initially objected to the proposal because they thought it was “going too far.” Secretary of the Shanghai Party committee Yu Zhengsheng said during the NPC and CPPCC that relevant central government officials believe the plan is reasonable and asked the State Council and related state offices to give their support.
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