Research On Shanghai Financial Industry Cluster

With the rapid growth of economy and continuous improvement of internationalstatus since the implement of the policy of reform and opening up, there is an urgentcall for China to build an international financial center to push the economydevelopment forward into a higher stage. There is no doubt that Shanghai is the mostsuitable city to develop financial industry clusters and international financial center,since Shanghai is considered as one of the cities which possesses the most favorablegeographic condition, the most developed economy, and the most active financialmarket in China.In this situation the thesis of ’the research of Shanghai financialindustry clusters development’ is proposed.The paper reviewed the development history of financial industry cluster and itscurrent situation in Shanghai, evaluated Shanghai’s competitive position of financialindustry cluster by using measurable metrics which can reflect the development levelof industrial clusters and reports on domestic and international professionalorganizations. It suggested that Shanghai remain the dominant competitive positionin financial industry among domestic cities, while there is a large gap compared withother mature veteran international financial center such London, New York, etc.Thepaper also shows that Shanghai’s financial industry clusters do promote the economicgrowth and development with reducing transaction costs, inspiring technologicalinnovation and optimizing resources distribution and forming reginal brands. Basedon the diamond model which affect the development of Shanghai’s financialindustrial clusters, the paper has done a SWOT analysis from several aspects, such asfactors of production, demand conditions, corporate strategy, structure and competition, related and supporting industries, and government support. It concludedthat it is a wise option for Shanghai to develop the financial industry cluster.Meanwhile, Shanghai will face the coexistence of the challenges and opportunities tobecome the international financial centre.In the end, the study suggested thatShanghai will overtake Hong Kong’s competitive position in2020by developing itsfinancial industry clusters, basically completed the strategic objectives of aninternational financial center which will adapt China’s economic strength andinternational status of RMB. It also raised the "government-led model" baseddevelopment path and emphasized to seize the great historical opportunity ofShanghai to build FTA.The study concluded by raising seven measures to developShanghai’s financial industry cluster, including personnel training, introduction offinancial professionals, multi-level capital market building, encouraging financialinnovation, improving financial market mechanisms&functions, strengtheningrelated industries, improving the regulatory environment of financial industry andincreasing government support for efforts, etc.