Financial centers with varied cores promoted

Chinas central bank will encourage local governments to create financial centers and will guide them to develop the centers which will have different focuses, a spokesman said yesterday.

"We understand how some cities want to turn themselves into finance centers and we will definitely encourage them," said Li Chao, a spokesman for the Peoples Bank of China, in Shanghai.

"But the finance centers will have to be classified at different levels and with different focuses based on the financial infrastructure of the cities."

Li made the comments when asked about the central banks view over the potential for competition among mainland cities, including Shanghai and Beijing, which all wish to become financial hubs.

Earlier this month Beijings government unveiled a proposal which, for the first time, stated that it is planning to make the city "a finance center with an international influence."

Tianjin is developing its Binhai New Area as a financial zone by applying to launch the countrys first national over-the-counter stock exchange. Shenzhen in Guangdong Province is on track to unveil the nations growth enterprise board.

Li said that a senior official at another city in central China recently talked to him expressing the wish to set up a financial center. "We encourage local governments to participate in finance development," Li said.

Li noted that Shanghai has strong finance infrastructure advantages and will be fully supported by the central bank and other regulators as it bids to become an international financial center.

Shanghai is set to host the citys first high-level annual international finance forum tomorrow and Saturday. The Lujiazui Forum will be attended by the chairmen of Chinas banking, insurance and securities regulatory bodies.

Guest speakers include Zhou Xiaochuan, the governor of Chinas central bank, David McCormick, under secretary for international affairs for the US Department of the Treasury and senior executives at Morgan Stanley and Goldman Sachs.

"We hope to attract more international awareness of Shanghai through the forum," said Fang Xinghai, director of the Shanghai governments financial services office, at a media briefing. "Wed like to borrow overseas experience and expertise to deepen the countrys financial reforms".

(Shanghai Daily May 8, 2008)