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SHANGHAI should offer more incentives to lure global talents and encourage multinational companies to list in the city's stock market to help realize its goal of being an international financial hub, experts said yesterday.
"Shanghai could be made more attractive to financial talents if such incentives as lower income taxes are offered to them,'' said Fred Hu, a managing director at Goldman Sachs Asia Pacific, at the Lujiazui Forum.
Hu said one of London's advantages over Frankfurt as an international financial hub is its low tax rate. Shanghai's individual income tax is still higher than in Hong Kong and Singapore, Hu said.
He also noted that the city should make its financial sector more transparent and to ensure rules and regulations are put in place to attract global banks, insurers, securities houses and fund firms.
Andy Xie, a managing director at Rosetta Stone Capital, echoed the view, saying the city should attract global fund managers with a lower tax rate and lure overseas firms to list domestically.
Allowing foreign firms to list in the city can help local investors gain access to quality international industry giants and help beef up the development of the city's capital market, according to Xie.
''Shanghai has the unique advantage to ultimately become an international financial center as the country's financial trading centers are located in the city,'' said Xie.
Huang Qifan, executive vice mayor of Chongqing, China's fourth municipality, echoed the view that transparency and rule of law are important prerequisites for a financial center.
''Shanghai is on track to becoming an international financial center. It is not now as Shanghai still falls short of certain requirements but I think it will be in five to 10 years,'' said Huang.
Competition is unavoidable between financial centers and this is not a necessarily bad thing, said Laura Cha, deputy chairman of HSBC Asia Pacific and a former vice chairman of the China Securities Regulatory Commission.
''New York competes with London while Hong Kong vies with Singapore. Competition will improve the quality of efficiency,'' said Cha. ''If you can attract enough financial products, capital, and professionals to work for your city, you naturally have all the conditions required for an international financial center.''
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