Construction Of Multi-layer Financial Center System In China

The financial industry is the core of all economy activity. Financial centers haveexcellent business environment, attracting the HQS and branches of multinational banksand companies to settle. The congregating of capital not only boosts the development ofthe local area, but also promotes the development of surrounding region by radiationeffect.70s and 80s of 20th century is the silver age for the research of financial centre.After then, the research was more or less focused on how the tend of globalize economicinfluence the financial centre. Most of Chinese economists focus their research on aparticular city, discussing how the city to be developed into a financial centre. Theopinion of the writer is, theory is the guideline for the practice. All activities cannot beachieved without the practical understanding of them. This article is going to focus onthe process of development of financial centre, and give some suggestions on how tobuild multi-layer financial centers in China.The writer gives an abstract of basis of the financial centre developing theory. Suchresearch on this basis helps us to understand the theory much more. There are kinds oftheories explaining why most of the companies like to stay in certain big cities. Two ofthe most common theory of Financial centre develop theory are scale economics andeconomies of localization. The scale economics is talking about the costs decreasing dueto the congregating of financial agencies and the economics of localization shows theeffects of the geographical location during the city forming a financial center.Then writer discussed the history of the development of financial centre. Thedevelopment of international financial centre has four phases: London before WWI ----London and New York in WWII ----New York after WWII ----multiple financialcenters after 60s of 20th century. Base on the financial centre development history,writer analyzed all the reasonable causes to influence the financial centre and draw theconclusion---there are multiple-forces which caused the appearance of financial centertogether. Thus, the writer give out the "composition of forces"model, which consider thecomposition of thrust, tensile force and the policies of government is the cause ofappearance of financial center. The tensile force generally includes history, naturalenvironment, and level of technology development which are the outer factors ofspeeding up the development of a city. The thrust includes the level of economicsdevelopment, the financial system and the demand-supply relationship. The three forcesnever exist independently, but drive and influence each other frequently during thedevelopment of a financial center. The government's policies can affect the financialcenter directly of indirectly and because of this, we can say that the government canbalance the development of a financial center, accelerating or decelerating respectively. Again, the article also states, according to long wave theory, the bar center ofworld economy is moving toward Asia-pacific area. Of course, China plays a muchimportant role in it. Finance is the most efficient weapon to occupy the share ofworld market. That's why the most important strategy of Chinese is to plant cities ofdifferent location level into multi-level financial centers. Financial centers are usuallydeveloped in two ways. One is naturally developed, another is national developed.Naturally develop mode means all the processes depend on how economy marketdevelops. National developed mode means the whole system is designed by certaindepartment of the government, boosting the financial market by changing the financialsystem. According to the situation in China, writer thinks the financial centers should beimplemented using the national developed mode. Plant multi-level financial centers atmacro-economics level, make use the radiation effects of financial centers, solve theunbalance of the economic development between different regions through allocatingfunction of financial centers. In this part of article, the writer analyses the "financialcenter fever", shows that there are unbalances between different regions with reliabledata. After that the article shows how financial centers can perform to balance theeconomics. Based on all of these, the writer suggests that it should be the nationaldeveloped mode to apply into the construction of multi-level financial centers system.