At this time, the global cities at the top of the financial services industry are all located outside of mainland China — for good historical reasons. But according to opinions reflected by the graphic above, a significant number of the world’s senior financial executives think that Shanghai may soon be one of the top financial centers of the world — if not the very top center.
Duff & Phelps surveyed 240 senior financial executives for their 2020 Global Regulatory Outlook report. Their opinions represent a significant portion of the world’s financial services industry leaders.
Although New York maintains the top spot, some executives surveyed believe that the top financial center could shift to Shanghai, Singapore, or Hong Kong.
… According to survey results, 8.7% of respondents said Shanghai is predicted to be the next global financial hub by 2025. Shanghai houses the largest stock exchange in China, the Shanghai Stock Exchange (SSE), and the SSE Composite tracks the performance of over 1,600 listings with $4.9 trillion in combined market capitalization. __ https://www.visualcapitalist.com/shifting-perspectives-the-top-financial-centers-in-the-world/
Looking over the summary of the Global Regulatory Outlook 2000 at Duff & Phelps, no clear reason for the “upgrade” of Shanghai can be found. And there are many reasons to argue against a significant move of global financial services to Shanghai (national financial services are a different matter).
The World is Full of Rosy Forecasts for China
To a degree still difficult for outsiders to absorb, China is preparing to shape the twenty-first century, much as the U.S. shaped the twentieth. Its government is deciding which features of the global status quo to preserve and which to reject, not only in business, culture, and politics but also in such basic values as human rights, free speech, and privacy.
In the lead-up to the anniversary [PRC 70th Anniversary], the government demonstrated its capacity for social surveillance. At the Beijing University of Technology, where students trained to march in the parade, the administration extracted data from I.D. cards to see who ate what in the dining hall, and then delivered targeted guidance for a healthy diet. In the final weeks, authorities narrowed the Internet connection to the outside world, secreted dissidents out of town, and banned the flying of drones, kites, and pet pigeons.
According to professional TV buffoon Bill Maher, “The future belongs to China.” And the scatter-shot jester is not alone in his prediction. Even right-wing commentators bemoan the apparent decline of the US and the corresponding rise of China:
The American age is seemingly coming to an end, with China ready to seize the world right out from under us. ___ World Belongs to China?
Globally, the “rise of Asia” viewpoint seems to be the mainstream opinion:
If the 19th century belonged to Europe, and the 20th century to the United States, then the 21st century now belongs to Asia.
Beyond the era of Western hegemony, Asia is returning to the patterns of commerce and cultural exchange that thrived long before European colonialism and American predominance. Even as the United States sits on the sidelines in this new phase of globalization, Asia’s growing heft is reordering the world economy. China has taken the lead in Asia, Africa and Latin America through its Belt and Road Initiative… __ The Future is Asian
The opinion of the Anglospheric left-wing is that China is certain to take over — with the help of Russia and radical Islamists. The belief by US leftists that the future belongs to authoritarian states such as China, Russia, and Iran, may explain the recent strong shift toward socialist authoritarianism inside the US Democratic Party.
Indeed, the three major rising powers in the world today — Communist People’s Republic of China, Russia and the Islamic Republic of Iran — all have anti-democratic repressive regimes.
… All three have worked hard on their nuclear weapons projects. China exploded its first nuclear weapon in the early 1960s and now is expanding its heretofore modest nuclear capabilities. Russia still retains 1,790 operational nuclear weapons, just topping the United States. Iran has been working on nuclear weapons since the mid 1980s and, thanks to the liberal American deal, should be able to gain nuclear weapons in the next decade.
The three countries are also using their economic resources. China, with a $10 trillion economy, is expanding its economic reach to places in East Asia and much of Africa. Russia is trying – though so far without success — to rebuild the old Russian-dominated equivalent of the EU with the 14 former republics of the Soviet Union before 1991. The Iran economy, with only $400 billion GDP, is using its economic resources to harden support for it in the Shiite Crescent.
Finally, the three countries often work together against a common enemy: the United States. __ Opinion on the Left
But there are dissenting opinions — well-informed people who think that the US is not quite finished, not yet. The most common argument against China is its failing birth rates and shrinking working-age population. Other reasons for China’s falling growth rates focus on skyrocketing debt and default rates, dismaying evidence of deadly pollution of soil, rivers, air, and harbors.
China’s demographics convey a society with no purpose except its own gratification. And, like Japan before it, the People’s Republic of China isn’t building an empire, it’s destroying a society. __ Future Does Not Belong to China
China’s Belt and Road Initiative is a desperately ambitious effort to link China to high consuming populations of Europe and natural resource suppliers across Asia and Africa — and to create alternative routes of supply should China’s vulnerable sea routes be choked off.
China is rushing to install 5G networks in as many parts of the world as it can, before rival 5G technology starts coming from western and free-Asian countries. This is ironic, because China (and Huawei) stole much of its “cutting edge technology” from outsiders to begin with.
Censorship in China is so tight that only the party apparatus will ever be able to make full use of 5G inside of China. 5G will allow the Chinese to spy on any country where Chinese communications network technology has been installed, of course. We hope that
dupes countries such as the UK can find work-arounds for that.
To some people, the language and culture of the world will indicate whose century it is:
How can it be China’s century if the world is still wearing jeans, drinking artisan beer, eating potato chips, and listening to rap, hip hop, rock, blues, jazz, and salsa (yes, salsa surfaced in the streets of New York in the 1960s)? How can this be possible if the international language of business is English? How can it be true if the West continues to invent new technology and transform the world while the Chinese continue to copy and replicate what is invented in the West? I will believe it when the West ceases to believe in its own cultural expressions and instead adopts the Chinese vision of the world. __ Bangor Daily News
In more recent developments, a bat virus is taking a serious toll on the Chinese economy, Chinese morale, and the Chinese sense that the 21st Century belongs to the Middle Kingdom.
Chinese health workers in Wuhan and its broader Hubei Province — where some 60 million people are effectively quarantined — have struggled to deal with the sheer number of people who may have been infected. Hospitals are overwhelmed, and there aren’t enough testing kits to go around.
The New York Times reported Friday that offers from WHO and the U.S. Centers for Disease Control and Prevention had largely been ignored by officials in China for more than a month as the virus spread.
The outlet noted teams with the CDC’s Epidemic Intelligence Service can be ready to travel within 24 hours, but China’s ambassador to the Untied States, Cui Tiankai, wouldn’t say Sunday if the agency would be allowed to send experts to the country, at least as direct emissaries. __ Source
Over the past weeks, the mega-cities of China have become ghost towns. Only a desperate, massive injection of capital keeps the Chinese economy afloat, for now.
By now, China has a Potemkin economy where the official economic growth rate is six per cent a year, but the true number — as measured by electricity use or megatons of freight carried by the railways — is between two and three per cent. Knock two percentage points off that and you have no growth at all — and a crisis of survival for the regime.
Having already killed almost 20 times more people than Chernobyl, the Wuhan 2019 nCoV seems poised to leave its mark on China’s troubled trajectory — and to change the way that thoughtful people view China’s future. Foreign companies are leaving, Chinese companies are laying people off.
Another contagion may soon spread within China. But rather than a virus, it could be a thought — the thought that the Chinese government is unable to care for its people and so must be taken down. Given the Chinese government’s poor track record of trying to contain other contagions, it’s quite unlikely it would be able to contain this one as well.
Some sort of major blow back is likely in the coming months. Chinese political power, already under immense pressure, may start to fracture as a result. This could be the beginning of the end of Communist China. __ Futuretimeline
Peter Zeihan’s latest talk arguing that the 21st century will see continued American dominance: