Next financial center: shanghai?

Quote from nazzdack:

?........:(
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sorry you might misunderstand me. and what I said might not be politically correct in states. But from China point of view, if it wants to build the world financial center, it is no brainer to lure best and smartest jewish financial professionals from NY and London. It is like to say if China want to build the best wine industry , it will lure frenchmen, if US wants to have best Chinese food, it will lure chinese chefs.Just simply like that.

While the financial industry is over developed, it is not so in China. This makes capital and resources mis allocated in China. Many wasteful development in China is result of non-existent of efficient capital market. China near term goal is to make RMB a regional currency in SE asia and east asia trading blocks. But China doesn't have any meaningful fixed income derivative market, making this task very hard.

I know many people point fingers to bankers for current problems. I do think bankers should take some blame. but the root cause is not bankers, but globalization. As long as you have free movement of capital and technology and no free movement of labor, this problem will be there. There is no solution, to be honest.
 
Quote from TraderZones:

u beat me 2 it. I was going to say, with what is going on with Google right now -being hacked and the censorship and etc., anyone really think GS would make it their center?

Wanna trust if your money disappears that you (a foreigner) would get your money back?
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You are a fool if you think Google quit China because of freedom of speech and being hacked.
Granted , goole has better technology and better platform and better people than its competitor baidu, but it is still losing business to baidu. why?
1 baidu play foul against google and google doesn't know how to fight back
2. baidu just know much better how to censor search results. Google never fully understands chinese culture and political dynamics in China, and it is arrogant not to adapt, so it is not good at censoring its contents.

After some cost(ruined google's good reputation) and benefit analysis ,google made decision to pull out China. Big mistake ! why?
To outsider. China has no rules and laws, no freedom of speech. but if you take 20-30 years time frame, China made big progress being more open , more tolerate and more democratic. sure, there were set backs and zigzag in rent year, but overall the development is positive. as we know most google's market valuation come from US, China is only accounted for 5% of its current market cap. China offers tremendous growth opportunity.

it is not surprising one day baidu exceed google in market cap, maybe that is 30 years away.
 
Quote from not4kids:

Not a chance. China currently charges 0.5% transaction tax on all stock trading. You cannot day trade any stocks (i.e., you need to hold at least one day). The transaction cost of stock trading is about 1% of your principal. Chinese currency is not even freely convertible. If anyone complains about US financial markets, just send him to China. He will never complain again after he comes back.
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this could change. Unlike US, most stock invstors in China are retail money due to the reasons that chinese are biggest gamblers in the world.

Besides , there are more in financial market than stock trading.
 
Quote from mingsphinx:

Sounds like you dislike Hong Kong, I wonder why that is. Might it be that the Hongkies look down on what they regard to be uncouth Chinese? Money can only get you that far. After that, if you cannot walk the walk and talk the talk, you are just a bag of money to be fleeced. That is assuming you have money. But it has got to be really hard for a Chinese to get pissed on by the Hongkies. If it had not been for the massive grants of liquid cash pumped into the Hong Kong economy by the Chinese government, who knows what the former British colony would be like now.

Take from the poor and give to the rich. :D
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I have nothing against HK. China has a lot to learn from HK in terms of rules and laws, independent court system, modern business practice.
But HK is not in the same system. They have their own currency , they drive on the left and they don't speak mandarin, and the most importantly market size is just too small.
 
I think it's inevitable that Shanghai will rise as a financial center, but I don't like to see GS held up as some sort of model institution that China would be hoping to "get". What will more likely happen, is that Chinese financial firms will eventually carve out a dominant place at the table... just as Credit Suisse or HSBC have done.

The Chinese capital markets will, of course, be huge as the economy grows. In other words, larger than the US and the Euro-zone in 25 years. And in order to service these capital markets, institutions will grow. I don't think Goldman Sachs or any other Western institution will make major headway in China, just as they haven't in Japan or Korea. There are just too many cultural differences.

The Chinese commodity markets are already nearing the size of the CME. The equity markets are a little bit more difficult because of the historical legacy in public/private ownership. The Chinese currency/interest markets are non-existent because the central bank keeps a tight grasp on them. But eventually, all of these markets will continue to mature.

There's no doubt in my mind that Shanghai will eclipse London within 20 years, and probably match New York/Chicago in importance within 30. This won't happen because market participants "relocate" to China, but simply because China will redefine what the market is.
 
Quote from not4kids:

Not a chance. China currently charges 0.5% transaction tax on all stock trading. You cannot day trade any stocks (i.e., you need to hold at least one day). The transaction cost of stock trading is about 1% of your principal. Chinese currency is not even freely convertible. If anyone complains about US financial markets, just send him to China. He will never complain again after he comes back.
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China has 0.1% stamp tax only on stock selling. Stock purchase is not taxed. China's capital gains tax is 20%
 
Quote from traderzhangSan:
Google never fully understands chinese culture and political dynamics.....
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Chinese people prefer to do business with other Chinese people, confirmation of the obvious. :(
 
Quote from nazzdack:

Chinese people prefer to do business with other Chinses people, confirmation of the obvious. :(
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You have no clue about china. On the contrary, Chinese trust foreigners more than Chinese. This is apparent when you look at baby food products in China.

Google just blew it
 
Quote from traderzhangSan:

this could change. Unlike US, most stock invstors in China are retail money due to the reasons that chinese are biggest gamblers in the world.

Besides , there are more in financial market than stock trading.
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True, things could change. So could US markets. It is also true that there are more in financial market than stock trading. US has the most liquid futures/commodity markets and the most liquid debt markets, and the most liquid derivatives (such as CDS, interest swaps, etc) markets. Unfortunately, China just started its futures market, has a very small debt market, and is still experimenting with its commodity market. The derivative markets in China is not even on schedule yet. For China to replace US as world financial market center, you need two conditions: China has to do things right and US has to screw up. Unfortunately, China did not do right things. Chinese government wants everything under control and dislikes anything beyond its control. I don't think Chinese government truly believes free markets will work.
 
Quote from hoffmanw:

China has 0.1% stamp tax only on stock selling. Stock purchase is not taxed. China's capital gains tax is 20%
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Sorry about my 0.5% stamp tax. Whether 0.1% or 0.5%, market participants do not like stamp tax. This number can change overnight. As far as I know, there is no capital gain tax in China right now. However, this could also change overnight.
 
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