Whoever is doing Shanghai’s PR deserves a gold star.
First there were the stories about how Shanghai is going to eclipse Hong Kong as a financial center and gateway for capital into China.
Now there is a report from a law firm that really ought to know better (Eversheds) suggesting that Shanghai is going to overtake London too.
According to a survey of 600 "senior business decision-makers", Shanghai will be a more important financial center than London within 10 years.
The spurious logic behind the assertion is that 91% of these "senior business decision-makers" in Shanghai are confident of the economic outlook over the next 12 months, while only 22% are confident in London.
Does this make any sense to you? People in Shanghai, who perhaps aren’t the most neutral respondents, say that over the next year they hope their businesses will grow. Therefore they are happy to make a prediction of where the business will be in a decade’s time.
It is little wonder the world is in dire economic straits if these "senior decision-makers" and their crystal balls are in charge.
Anyway, it is a good opportunity for China to bask in smugness, but let’s face it, the chances are that Shanghai will overtake neither Hong Kong or London, even by the city’s target of 2020.
Let’s just consider what will have to happen first: China will have to abolish capital controls and float the yuan freely. China will have to redraw the rules governing its capital markets and open them up to foreign investment fully. Chinese companies will have to become transparent and accountable. Corruption will have to be fully tackled. Government interference will have to be reduced to a minimum.
And, above all, the world’s most talented financiers will have to decide they want to live in an unstable and politically-repressive country filled with pollution, comparatively worse education and healthcare, high personal taxation and, ahem, few English-speakers.
The endless hyping of Shanghai as a financial centre is a great bandwagon, and I’m all for the city setting ambitious targets, but "senior decision-makers" should understand the city’s development is not just about skyscrapers and impressing people with its "dynamism".