Shanghai's Development As An Ifc: A Comparative Analysis Of Financial Ecological Environment For Shanghai Hong Kong And Singapore

Finance is the core part of modern economy, and financial centers are where financial activities assemble. Thus financial centers are playing a critical role in financial system. Pushed by economy globalized and information technology, international financial market evolved rapidly and capital is flowing quicker. Many countries are more and more emphasize the role of financial centers in their region's development. The competition for international finance centers (IFC) is fierce. Looking back on the evolvement of IFCs, China as the biggest developing country in the world also needs an international financial center backed by its huge economy. Obviously Shanghai should be the first choice, because its compelling advantages in trade, transportation and finance. This is also what this paper lies on.A great innovation of this paper is that this paper applies Data Envelope Analysis (DEA) in the research, combined with the idea of financial ecological environment. Before using the DEA analysis, this paper first constructs the input-output system, with the measurement of financial ecological as input and financial index as output. In this paper, the financial ecological system is comprised of three parts: macro economic environment, micro business environment and financial market. The data sources are Global Competitiveness Report published by World Economic Forum and Global Financial Centers Index compiled by the city of London.This paper concludes that the advantages of Shanghai's development as an international financial center are its macro economic environment. However, the most micro factors that are very important in the formation of international financial centers are Shanghai's disadvantages, such as: human capital, legal environment, financial market sophistication and so on. This paper also makes some suggestions according the results of analysis, like Shanghai should diversify its financial products it can provide to investors. More importantly, Shanghai should keep some key financial products in mainland rather than give them to Hong Kong.