Shenzhen jumped higher in the latest ranking of the world's financial centres, while Hong Kong moved closer to overtaking London as number two globally, according to a semi-annual survey by the China Development Institute and the London think tank Z/Yen Partners.
New York retained the top spot in this year's Global Financial Centres Index, extending its lead over London by 17 points. Hong Kong remained in third place, but was just two points behind London as concerns mount over the economic effect of the United Kingdom's plan to leave the European Union as soon as the end of October, known as Brexit.
Shenzhen, a technology hub and key cog in the Greater Bay Area economic development plan, moved up five places to ninth globally. Shenzhen was in the top 10 in the survey released in September 2009 and in March 2010 and has been out of the top 10 since. The survey began in 2007 and Shenzhen first appeared in September 2009.Shenzhen counts web giant Tencent Holdings and telecommunications companies Huawei Technologies and ZTE among its tech titans.
"London is in a 'slipping second' position globally and a 'slipping first' in Europe amidst high volatility emanating from policy uncertainties, Brexit, trade wars, and geopolitical unrest," Michael Mainelli, executive chairman of Z/Yen, said. "Asian centres and a resurging Paris are fighting for that second place spot."
The index ranks 104 financial centres across the world, using assessments from 3,360 financial professionals, as well as quantitative data provided by the World Bank, the Economist Intelligence Unit, the United Nations and other third parties. Nearly half of the respondents were from Asia-Pacific.
Cities are ranked on a variety of areas of competitiveness, including business environment, human capital, infrastructure, financial sector development and reputation.
The results come as Hong Kong has faced a threat to its reputation as an international financial centre following protests and civil unrest over a controversial extradition bill that would have made it easier to send criminal suspects to mainland China for trial.
The unrest has disrupted transit and hurt the retail and tourism industry in the city, in particular. Some economists have said they believe Hong Kong's economy could contract this year as the protests and a trade war that has raged between the United States and China for more than a year have weighed on business and investor sentiment.
Hong Kong Chief Executive Carrie Lam Yuet-ngor formally withdrew the bill earlier this month, but that has not stopped the protests, which have broader issues, including housing and income inequality in the city.
The top 10 financial centres globally were: New York, London, Hong Kong, Singapore, Shanghai, Tokyo, Beijing, Dubai, Shenzhen and Sydney.
"Respondents consider that New York, Hong Kong, and Singapore will benefit substantially from Brexit," the survey organisers said. "In Europe, Frankfurt is considered likely to benefit most, followed by Paris, Luxembourg, Zurich, and Dublin."
On Thursday, the Bank of England said that uncertainty over Brexit is making UK economic data "more volatile" and have continued to weigh on business investment.
The list of uncertainties facing UK has dented London's standing as top global financial centre. The survey found New York, Hong Kong, and Singapore will benefit substantially from Brexit. Photo: Bloomberg alt=The list of uncertainties facing UK has dented London's standing as top global financial centre. The survey found New York, Hong Kong, and Singapore will benefit substantially from Brexit. Photo: Bloomberg
"It is possible that political events could lead to a further period of entrenched uncertainty about the nature of, and the transition to, the United Kingdom's eventual future trading relationship with the European Union," the central bank said. "The longer those uncertainties persist, particularly in an environment of weaker global growth, the more likely it is that demand growth will remain below potential, increasing excess supply. In such an eventuality, domestically generated inflationary pressures would be reduced."
Among Asia-Pacific financial centres, 20 of 27 centres in the region either retained or improved their position in the rankings, according to the survey. Nanjing also entered the index for the first time.
As part of the survey this year, the index asked about fintech centres, ranking Beijing and Shanghai number one and two respectively. New York, Guangzhou and Shenzhen rounded out the top five fintech centres globally.
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