Next financial center: shanghai?

[Copernicus]

after China bubble pops, be in in 6 months or 2 yrs, no one is going to go near China for few years.
everything is being extrapolated in the future and we all know how that ends. its never different.
Hong Kong will always be there because of tradition, Shanghai may not happen in our lifetimes.

 

[newguy05]

shanghai will become the financial hub of asia, overtaking hongkong and tokyo, it's not a question of if but when (soon). But i will be very surprised if it ever overtake new york for a couple reasons:

1) The chinese government rules all the banks with an iron fist, they are nothing more than utility companies. The govt will never allow investment banks, especially western ones, to move into china and corrupt its foundation with gimmicks dreamed up by their quants. The western banks with major presence in shanghai now are hsbc, morgan stanley, and citi, almost all of it focused purely on regular banking and m&a.

2) Despite the significance of the chinese economy and their financial presence, the actual markets over there are still very primitive, you only have regular non-shortable non-daytrade stocks, standard corp/govt debt/bonds, an illiquid future/commodity market that is highly unregulated and still in its infancy, and not much else. This was on purpose by the government to ensure it has complete control over the market without all the unmarketable derivative shit that created the problems during the meltdown. Although i think they are too cautious, regular options should be allowed!

3) It's not a bad thing what the chinese govt is doing with their financial system - the complete control over the banks, run them like utilities, low risk/leverage, etc.... as it clearly demonstrated during the meltdown even the most antichina critics have to agree, compared to the western banks.

I dont think the chinese govt will ever trade their control over the banks/financial system for the world's top financial center title, stability above all else is the chinese motto, because stability means the 1.3 billion ppl will not revolt against the govt - biggest fear by the communist leaders.

Now mumbai/india, whoever suggested they may become a world financial hub is on a different planet. If you ever been to india, only that tiny bubble area within mumbia is western/developed, almost the entire country as you walk out that bubble is still a slum, dirt roads, and horse carts. You cannot even comprehend the infrastructure comparison between india and china. Nevermind the financial systems, capital markets and other components. Yet the funny thing in the next 2 decades, new york wall street will most likely be controlled by indians as second generation moves above the low level paperpush positions to senior management on the street - mark my word, like what they have already successfully achieved in IT/technology, and medical fields(to a lesser extend). This is not a racist comment by any means, just stating the fact and a future prediction.

Singapore is probably the only other asian country that could become a world financial hub....

 

[jagadish]

I think if you want profits, China is good.
If you want 'profits + life' India is better.

 

[MathAndLogic]

Quote from traderzhangSan:

I am sure that US will emerge stronger from current financial crisis.

But what if American people are fed up with Wall street bankers, trading ,hedge fund and all that finance activities(which don't add much real value to the society)? It is even possible that some day Goldman Sachs will relocate to Shanghai as its headquarter?

it might be unthinkable today. But remember 3 years ago, nobody would imagine that WS was facing the danger of total collapse.They were masters of universe ,the best and brightest, the best of the best, how could they do wrong?

And I also think Jewish people find shanghai is a very attractive place. Historically there were many successful Jewish bankers in shanghai. one time before Communist took over China, over 30% shanghai stock exchange seats were taken by jews. The only problem is that Jews don't like communist ideology. But that is not a real problem at all. Today's China is a total capitalism country on the contrary to many believe. And China is more open to outsider than many might believe.

if this happens, the world will see the greatest wealth transfer ever in history.

Chinese are very smart. Here are the results for the International Mathematics Olympiad and they are almost always gold or silver:

http://www.imo-official.org/results.aspx

China is the third country to develop nuclear weapon; they launched their first satellite in 1970 during the turbulent time of Cultural Revolution. They manufacture their own vehicles and aircrafts.

You are wrong, traderzhangsan. What China needs is exposure to financial instruments, NOT parasites like Goldman Sachs. The US is better off, and the world is better off without parasites and leeches like Goldman Sachs.

 

[xiaohu]

Quote from traderzhangSan:

I am sure that US will emerge stronger from current financial crisis.

But what if American people are fed up with Wall street bankers, trading ,hedge fund and all that finance activities(which don't add much real value to the society)? It is even possible that some day Goldman Sachs will relocate to Shanghai as its headquarter?

it might be unthinkable today. But remember 3 years ago, nobody would imagine that WS was facing the danger of total collapse.They were masters of universe ,the best and brightest, the best of the best, how could they do wrong?

And I also think Jewish people find shanghai is a very attractive place. Historically there were many successful Jewish bankers in shanghai. one time before Communist took over China, over 30% shanghai stock exchange seats were taken by jews. The only problem is that Jews don't like communist ideology. But that is not a real problem at all. Today's China is a total capitalism country on the contrary to many believe. And China is more open to outsider than many might believe.

if this happens, the world will see the greatest wealth transfer ever in history.

I think before the GS executives start shifting to Shanghai..

They need to ask themselves what will happen to them had they traded CDOs with China Life or Ping An insurance instead of AIG.

 

[TraderZones]

Quote from heech:

That would be an extremely long conversation, and probably not a fruitful one.

But let's simplify it this way: find someone from mainland China who remembers 1989 and also understands 2010, and ask them whether China has changed.

the conversation was about the Chinese govt itself, not about China's people, its economy, its businesses, etc....

And the reality is, they still rule as someone just said, with an iron grip.

 

[MohdSalleh]

Quote from jagadish:

I think if you want profits, China is good.
If you want 'profits + life' India is better.

i think that is not correct as many indian girls are very traditional, have arranged marriages and are not open to relationships with white,chinese other races. so to be a global city with this kind of thinking is very hard.

 

[meir13]

I believe, Hong Kong is very hard to die. Coz there is still rule of law and free market. No customs regulations, very liberal financial markets and easy regulation. Plus low taxes. That makes big difference compare to Shanghai. It might create some kind of megapolis with Shenzen. Mainlanders still do flock into HK to spend money in brand goods, coz they dont have trust in Mainland businesses. Go to for example Canton Rd. to see it you rself. A lot of rich individuals and companies from Mainland do keep their cash in HK banks.

 

[MohdSalleh]

Quote from newguy05:

shanghai will become the financial hub of asia, overtaking hongkong and tokyo, it's not a question of if but when (soon). But i will be very surprised if it ever overtake new york for a couple reasons:

1) The chinese government rules all the banks with an iron fist, they are nothing more than utility companies. The govt will never allow investment banks, especially western ones, to move into china and corrupt its foundation with gimmicks dreamed up by their quants. The western banks with major presence in shanghai now are hsbc, morgan stanley, and citi, almost all of it focused purely on regular banking and m&a.

2) Despite the significance of the chinese economy and their financial presence, the actual markets over there are still very primitive, you only have regular non-shortable non-daytrade stocks, standard corp/govt debt/bonds, an illiquid future/commodity market that is highly unregulated and still in its infancy, and not much else. This was on purpose by the government to ensure it has complete control over the market without all the unmarketable derivative shit that created the problems during the meltdown. Although i think they are too cautious, regular options should be allowed!

3) It's not a bad thing what the chinese govt is doing with their financial system - the complete control over the banks, run them like utilities, low risk/leverage, etc.... as it clearly demonstrated during the meltdown even the most antichina critics have to agree, compared to the western banks.

I dont think the chinese govt will ever trade their control over the banks/financial system for the world's top financial center title, stability above all else is the chinese motto, because stability means the 1.3 billion ppl will not revolt against the govt - biggest fear by the communist leaders.

Now mumbai/india, whoever suggested they may become a world financial hub is on a different planet. If you ever been to india, only that tiny bubble area within mumbia is western/developed, almost the entire country as you walk out that bubble is still a slum, dirt roads, and horse carts. You cannot even comprehend the infrastructure comparison between india and china. Nevermind the financial systems, capital markets and other components. Yet the funny thing in the next 2 decades, new york wall street will most likely be controlled by indians as second generation moves above the low level paperpush positions to senior management on the street - mark my word, like what they have already successfully achieved in IT/technology, and medical fields(to a lesser extend). This is not a racist comment by any means, just stating the fact and a future prediction.

Singapore is probably the only other asian country that could become a world financial hub....

singapore is way too small, the economy was already on the downhill thats why the ruling party decided to build those casino resorts and biomedical centre in order to transform itself and diversify the economy, it has also in recent years gave citizenship to many chinese from China to boost its dwindling population, it wont be surprising if in the near future Singapore becomes an overseas province of China.

 

[MohdSalleh]

Quote from meir13:

I believe, Hong Kong is very hard to die. Coz there is still rule of law and free market. No customs regulations, very liberal financial markets and easy regulation. Plus low taxes. That makes big difference compare to Shanghai. It might create some kind of megapolis with Shenzen. Mainlanders still do flock into HK to spend money in brand goods, coz they dont have trust in Mainland businesses. Go to for example Canton Rd. to see it you rself. A lot of rich individuals and companies from Mainland do keep their cash in HK banks.

hkg is very dynamic, but actually its not a good place to live, things move very fast, people are quite rude due to the fast pace of life, lots of shoving and pushing around. In that respect, Singapore is better.