This paper assesses the major cities in mainland China that are competing to become international financial centers (IFC). Shanghai, Beijing, and Shenzhen are compared in terms of their strengths and weaknesses as IFCs. We find that in China, the state plays a particularly important role in the growth of a financial center by providing favorable policies, creating localization economies, consolidating banks, and strengthening the city's power through state-owned enterprises. Our analyses generate a contour map of China's emerging IFCs in a global context and thus provide an important first step toward theorizing IFC development in a transitional economy.

In this study, the Document Analysis Method is used to examine the ¡§Banking Services¡¨ in GATS from WTO documents and ¡§Core Principles for Effective Banking Supervision¡¨ from Basel Committee firstly. Secondly, the reform and open policy on banking in Mainland China during past decades has been reviewed. Emphases are put on the reform policy on account of the process of becoming a membership of WTO. Following part of the study focuses on Shanghai banking development. The history and reform of shanghai banking is the major subject. Besides, whether the blueprint of Shanghai banking and financial center will be achieved or not is also reviewed. In the study we find that Shanghai has a blooming economy, the banking industry in Shanghai also situates a leading position in Mainland China. But there are also many difficulties for Shanghai to overcome if Shanghai heads to achieve the goal of being an International Financial Center (IFC) in the world.

abstract: The city of Shanghai is set to become an international financial center (IFC) by 2020. To achieve this goal, it is imperative to clearly define the key characteristics of an IFC. In this study I draw from recent research on the ranking of IFCs to develop an index of these key characteristics that can be used to assess a city’s standings as an IFC. Based on a review of prior research, I first put together a comprehensive list of the indicators that have been used to evaluate IFCs, which includes six first-level indicators and 34 second-level indicators. I then collect information on all these indicators from public sources for the following eight cities each year from 2011 to 2013: London, New York, Paris, Hong Kong, Tokyo, Singapore, Beijing and Shanghai. Next, I conduct a principal component analysis (PCA) on my data, and obtain four primary factors that contain most information of the original 34 indicators. The first factor covers 18 of the original indicators and reflects a city’s level of development in general business environment. The second factor covers 10 of the original indicators and reflects a city’s level of development in financial markets. The third factor covers three of the original indicators and reflects a city’s level of economic vitality. The fourth factor covers three of the original indicators and reflects a city’s level of the costs of living. I further calculate the composite scores for the above eight cities along these four factors, and find that these eight cities can be classified into three tiers on the basis of their scores. The first tier consists of New York and London; the second tier consists of Singapore, Hong Kong, Paris and Tokyo; and the third tier consists of Shanghai and Beijing. I also find that Shanghai has been making progress in its scores along these four factors over the last three years, especially regarding financial market development, economic vitality, and cost of living. What Shanghai needs to focus on next is to improve its business environment so that it can move up to the second tier in IFC status. / Dissertation/Thesis / Doctoral Dissertation Business Administration 2015