Hong Kong and Shanghai: Yesterday, Today and Tomorrow

March 2008

Abstract

This study argues that Hong Kong will gain stature as an international financial centre when China is more open financially and Shanghai returns as a competing centre. This thesis is developed in relation to historical evidence of the last century, the current range and intensity of financial activity in the two centres, and a prospective analysis of the evolution of China's international balance sheet and Hong Kong's share therein. The method is eclectic, depending on rankings based on nosecounts of banks and their links for the historical comparison, multidimensional measures of balance sheets and trading activity for the current comparison, and regression analysis for projecting the future.