Despite the harshness of the financial and economic crisis, Shanghai is speeding up its efforts to build an international financial centre. The support and determination of the central government is a helpful support to that endeavour. I have no doubts that the Expo will reinforce the status of Shanghai not only as an international city, but also as an international financial centre. The global index of financial centres, carried out every year for the City of London, shows that Shanghai has consistently been one of the top three centres expected to become more significant in Asia. In addition, there has been a clear increase in the number of mentions in 2009. I am confident that this trend will be confirmed next year.
Expo 2010 is a unique opportunity to speed up Shanghai’s development as an international centre. From a seasoned banker’s perspective, my advice to Chinese authorities would be to offer an environment complying with international standards in terms of finance, regulation or fiscal rules. Some consequences must also be drawn from the financial crisis. First of all, in a competition with other global centres, a clear and stable legal framework is crucial. As a consequence of the past excesses, international investors will increasingly seek safe and predictable regulatory frameworks. Secondly, G-20 shows us that rules will be increasingly global in concept. While their application will be adapted according to different regions in the world, it will be essential to play the game and to enter into a new regulatory era. In contrast to past beliefs, regulatory arbitrage will no longer be perceived as an asset. On the contrary, it may be perceived as a financial centre’s weakness. Thirdly, the financial crisis has demonstrated the importance of ethics for financial market’s actors. To be sustainable, a financial centre must be built on the rationale of preventing abuses, rather than fixing them. Such wise strategy might not lead to quick wins. However, it has proved to be most successful over time. Lastly, the financial services industry must be encouraged to be pro-active. It should organise itself, draw its own rules or best practices when a need is identified, and apply them.
At the same time, the establishment of a world-class financial centre also requires attracting top-notch talent. A comprehensive strategy would help Shanghai to rise to the challenge. In my view, this requires two complementary approaches. On the one hand, Chinese talent should be trained and developed. Turning Shanghai into an education hub, with high quality research and distinguished professors would attract the best candidates. On the other hand, the city should have incentives in place to attract talent, in a city complying with international standards. Diversity must also be part of the picture, as a financial centre is a genuine microcosm. It is composed of banks or insurance companies, as well as lawyers, auditors, advisers, engineers, IT specialists, restaurants and sport centres! It is therefore important to cultivate a diversity of talent.
From my frequent travels to Shanghai, I have experienced that this is a vibrant city, and China’s most cosmopolitan city. The Expo will reinforce its status as International city. Its emblem, inspired by the Chinese symbol“the world”, reminds us that the city is a window opened to the world. Back in 1889, the success of the Paris Exhibition went beyond possible expectations at the time. Nowadays, the city still treasures a number of architectural legacies, such as the Eiffel tower, visited every year by millions of tourists. I am convinced that Shanghai will enjoy this year a similar success and wish the Expo 2010 the best of luck.
