HK, Shanghai among the elite

Shanghai remains the world's sixth most influential financial center, according to a new index of 45 cities, while Hong Kong moved up the ranks to third place.

Shanghai has made significant improvements in the services it provides and in the regulatory conditions it has in place, according to the fourth Xinhua-Dow Jones International Financial Centers Development Index released on Tuesday in Shanghai.

Shanghai has been at the top in the development and growth indicator for four consecutive years, showing an impressive performance and great potential for further growth, the report said.

"Shanghai's pilot free trade zone will benefit the city's growth as a financial center and support its aspirations to become a more influential international financial center," said Shen Haixiong, deputy editor-in-chief of Xinhua News Agency.

Analysts said Shanghai's pilot FTZ program will also upgrade the city's core competitiveness and boost its status as a global financial trade, shipping and logistics hub.

"While the initial set of detailed policies and rules have yet to be unveiled, we think the areas related to financial innovation, reducing investment controls and approvals, simplifying customs procedures and internationally competitive tax regimes are worth watching," said Jian Chang, an analyst with Barclays Research.

"Shanghai has been through hard times. Its stable position in the financial center list in the last four years is evidence of that," said Jiao Ran, director of the economic information department at Xinhua.

A report that accompanied the index said that while European financial centers are still recovering from the eurozone's sovereign debt crisis, financial centers in Asia have gained increased influence as a result.

The traditional financial powerhouses of New York, London and Hong Kong hold the top three spots, followed by Tokyo and Singapore.

Peter Roffman, vice-president of Standard & Poor's, said he believed that the results clearly reflect Shanghai's growing influence in the financial services arena and China's overall economic global strength.

Among the financial centers of the BRICS countries, Shanghai ranked top in various indicators, including appeal to investors, talent, innovation and convenience.

The report said that as some financial markets have suffered, the conditions that are important to customers within them have changed too.

Inevitably, some key European financial centers have seen their rankings drop, reflecting their troubles in recent years.

The index was comprehensive in its coverage: More than 60 different indicators were considered and more than 4,000 questionnaires sent out.

The indicator system rated international financial centers on five key aspects - financial markets, growth and development, industrial support, services and their general business environment.

The other cities on the top 10 are Paris, Frankfurt, Chicago and Sydney.

Beijing kept its 11th place on the list, while Shenzhen moved up four spots to 15th.

Pan Yingli, a finance professor at Shanghai Jiao Tong University, said that top financial centers such as New York, London and Hong Kong have a long tradition of providing quality financial services and still have resources that Shanghai lacks and will not be able to get in the short term.