By Zhang Liping & Han Meng, Research Team on “The Opening-up Strategy of China with the Support of a Remarkably Strengthened Economy”, DRC

Research Report No.23, 2016 (Total 4906) 2016-3-17

Abstract: Since the 1970s, the global financial industry has been aggregating to a certain region. On the one hand, promoted by this aggregation, related industries supporting financial development have sprung up in large numbers in this region, which have improved information flow and information asymmetry weakness, and reduced adverse selection and moral hazard problems. On the other hand, contacts between financial institutions have become enhanced and the efficiency of resource allocation has increased sharply, leading to dramatic cost reduction. At the same time, more financial institutions and even the real economy are attracted to gather in this region, establishing a positive feedback system with mutual promotion and self-reinforcement. Modern global financial competition, to some extent, is the competition among international financial centers on finance and finance-related industries, configuration platforms and the competence of financial resources such as institutions, capital and talents. As a major developing economy, China needs to establish its own international financial centers to aggregate more international financial institutions, capital and talents. Only in this way can we have greater competence of participating in international financial resource allocation.

Key words: opening-up strategy, international financial centers, international experience