Posted inRegulation

Shanghai eyes global asset management role

Government officials in Shanghai are ramping up the city’s ambitions to challenge Hong Kong as a funds hub.

Shanghai must accelerate its pace towards becoming a global asset management centre, and pressing ahead on improving foreign access to renminbi-denominated assets, Chinese government officials and regulators have said in policy statements

Shanghai United Assets and Equity Exchange president Zhou Xiaoquan published a recent opinion piece in an official mouthpiece, the China Securities Journal, urging the city to step up in establishing itself as global asset management centre and facilitate the internationalisation of the renminbi.

The move could bring more opportunities to foreign investors and intensify the competition between Shanghai and Hong Kong.

His remarks were in response to a notice of intent released by the Shanghai government in late May.

The notice proposed several measures such as further promoting Bond Connect, Shanghai- Hong Kong Stock Connect, Shanghai-London Stock Connect, and supporting qualified asset management institutions to apply for the qualified domestic institutional investor (QDII) scheme.

Zhou believes that Shanghai must establish its own international financial asset platform and offshore financial market business, while the city must also enhance the global pricing power of renminbi financial assets.

“Accelerating the establishment of a global asset management centre will further expand the variety and scale of renminbi asset transactions [and] strengthen renminbi pricing power in the international financial market,” Zhou said.

PBoC weighs in

Moreover, earlier this week a senior official at the Peoples’ Bank of China (PBoC) said that it supports Shanghai in its initiatives to explore the free convertibility of capital in its Lin-gang Special Area, the city’s pilot free trade zone.

“(PBoC) supports Shanghai to take the lead in the free use of renminbi, and further facilitate the inflow and outflow of corporate trade and investment funds, in compliance with the requirements of anti-money laundering, anti-terrorism financing, and anti-tax evasion,” Wang Xin, director of PBoC’s research bureau said.

Meanwhile, Hong Kong’s role as an established asset management hub and the main offshore renminbi centre has been enhanced  by the soon-to-be implemented pilot scheme for wealth management connect

The scheme is an important measure for the financial development of the Guangdong- Hong Kong- Macao Greater Bay Area, and a milestone in promoting mutual access of financial markets in the region.

The Hong Kong government said in a statement in late June that the initiative demonstrates the strong support of the Beijing government, underlining the leading role Hong Kong will continue to play as an asset and wealth management centre.

Part of the Mark Allen Group.