I’ve been meaning to address the Lujiazui Forum for a couple of weeks now, but just couldn’t find the time until a nasty cold/flu bug necessitated a couple of days off work for rest.  According to the WSJ, last month around 700 top policy-makers and finance professionals met to determine the fate of Shanghai as a global financial center and, more importantly, how to insure that the city will reach is potential as such a center alongside Hong Kong, New York City, and London.  While I think it should be a bit easier for China to work Shanghai into the global financial mindset in the wake of  recent catastrophe—that sees Wall Street as largely responsible for the cause of worldwide financial meltdown—it is definitely no gimme.

Although the universal mindset tends to be that China’s rise to power and influence is inevitable, Beijing will still need to ensure that changes are made before Shanghai can truly take on such an important role.  Likely the most important step along the path to financial prominence would be the transition of the yuan to a convertible currency.  I think it goes without saying that we won’t see a large-scale movement of capital or equity assets between China and global investors until the true value of Chinese currency can be easily established and followed.  Beyond currency issues, the central government will need to loosen regulatory control of the financial system; they will need to allow a freer exchange of capital, lower taxes on businesses, and a much easier way to register and maintain foreign-owned business entities.