Shanghai will speed up construction of a global asset management center, for which the city government issued a series of directives on May 17. They include optimizing institutions, launching innovative products and services, optimizing the financial market, promoting internationalization, introducing talent, and improving services. “We aim to build the city into an important hub for asset management in Asia, and bring it to the forefront of global asset management center cities,” according to the local financial regulatory bureau. By the end of 2020, Shanghai had 1,674 licensed financial institutions – a third of which were foreign-funded – with an annual turnover of over CNY2,270 trillion. The city took the lead in setting up institutions such as the Financial Court, the Court of Financial Arbitration, the Financial Consumer Protection Bureau, and the Financial Dispute Mediation Center, becoming one of regions with the best environment for financial development in the country.
Shanghai maintained its position as a top financial hub only behind New York and London in the latest Global Financial Centers Index released in March by the China Development Institute and Z/Yen Partners, a London-based market research company. “The availability of skilled people and flexibility of the labor markets is a major consideration when global asset management companies choose their branch location. Shanghai is working hard to attract talented professionals by providing a preferential taxation policy and a settled city policy,” it said.
According to the new directives, the city pledges to further facilitate attracting overseas talent, such as applying for professional certificates, permanent residence and apartments. Smoothing cross-border investment is also one of the key tasks.
Due to its openness, Shanghai has already become the top destination for foreign asset management companies entering China. Of the world’s top 20 international asset management institutions, 17 have been doing business in Shanghai. The city is now home to 29 of the 33 foreign private equity managers registered at the Asset Management Association of China. The Chinese authorities will further develop the Qualified Foreign Limited Partner (QFLP) and the Qualified Domestic Limited Partner (QDLP) schemes and the pilot program for real estate investment trusts (REITs). The Shanghai financial authorities are encouraging asset management institutions to participate in the management of basic pension funds, enterprise annuities and occupational annuities, the Shanghai Daily reports.
