China ups efforts to build Shanghai into strong international financial center

BEIJING -- China has intensified moves to develop its Shanghai municipality into a "strong international financial center" as part of the efforts to build up financial strength and promote high-level opening up.

The research bureau of the People's Bank of China, the central bank, unveiled a string of measures to improve Shanghai's competitiveness and influence in a statement on Tuesday.

The central bank will formulate action plans for Shanghai to facilitate cross-border financial services and enhance financial support for the headquarters economy, the statement said.

The city is encouraged to become a green financial hub, with efforts to promote the renminbi as a pricing currency for green energy. Its communication with other international financial organizations and centers will be strengthened to optimize business environment and attract more foreign institutions and long-term capital.

The new measures came as China moved to build itself into a financial powerhouse to pursue high-quality development of the financial sector.

The central financial work conference held last October called for accelerating the building of a nation with a strong financial sector. The goal was detailed at a key meeting attended by senior officials in January this year, with a series of core elements, including strong international financial centers.

The PBOC statement stressed the necessity of international financial centers to a nation that aims to develop a strong financial sector.

"The process of promoting the construction of Shanghai as an international financial center is the process of the country's continuous efforts to expand opening up," the statement said.

As one of the most internationalized cities in China, Shanghai plays a crucial role in the country's financial opening up.

The city boasts a diverse array of financial markets including stocks, bonds and currencies and provides a wide range of services from custody to settlement and clearing.

By the end of 2023, there were 548 foreign-funded institutions operating in Shanghai, accounting for over 30 percent of the total financial institutions there, and nearly 500,000 people were employed in the financial sector.

As an important hub for the renminbi's internationalization, Shanghai's cross-border renminbi receipts and payments amounted to 23 trillion yuan ($3.23 trillion) last year, accounting for nearly 44 percent of the country's total.

At present, the renminbi has emerged as the fourth most active currency in global payment, the third in trade financing and the fifth in transactions.

The central bank will improve the connectivity of financial markets at home and abroad, strengthen international standard governance and cooperation in financial infrastructure, and improve the legal and institutional construction of financial infrastructure, according to the statement.

Work will be done to establish a financial regulatory system commensurate with the level of financial openness, with enhanced digitalization of regulation and continuous monitoring of cross-border capital flows in key areas, industries, and businesses, the statement added.