Global Financial Centers Becoming More Diverse

Change in Established Financial Centers

Over the past decade, traditional financial centers have seen a decline in their appeal, as per the Global Financial Centres Index by Long Finance. This UK research initiative has been evaluating cities based on the competitiveness of their financial sectors since 2007. London, in particular, has seen a decrease in its competitiveness due to Brexit, but New York and Hong Kong have also experienced a decline.

Emergence of Chinese Financial Centers

Shanghai and Shenzhen have emerged as two of the top 10 financial centers worldwide. These Chinese cities have experienced a significant increase in their rankings over the past decade. In the first ranking by Long Finance in 2007, Shanghai and Shenzhen were placed 24th and 36th respectively. Recently, more Chinese cities have been included in the ranking, with some showing surprising improvements. For example, the coastal city of Qingdao scored 708 points in 2024, a significant increase from 594 in 2016. Following the Great Depression, other U.S. financial centers, excluding New York, also experienced a decline in their rankings, but have since recovered.

Asian Cities Aiming for the Top

Several other Asian cities are now aiming to join the top ranks of global financial centers. Seoul, the capital of South Korea, currently ranked 11th, has invested over $200 million in the past five years to boost its status as a financial hub. The city aims to attract more than 250 foreign financial firms and $30 billion in foreign direct investment by 2030, as reported by the Korea Herald.

Ranking Criteria

The Long Finance ranking considers various factors including business environment, financial sector development, infrastructure, human capital, and reputation.

Bottom Line

The landscape of global financial centers is changing, with more diverse cities emerging as key players in the financial sector. This shift reflects the dynamic nature of the global economy and the increasing importance of emerging markets. What are your thoughts on this shift in global financial power? Feel free to share this article with your friends and discuss. Don't forget to sign up for the Daily Briefing, available every day at 6pm.