|Title||Roadmap to Financial Hub in Northeast Asia|
- Four years have passed since strategies to promote a Northeast Asian Financial Hub were initiated in December, 2003, aiming to foster financial industry as the new growth industry. There are three stages to the roadmap of Northeast Asian Financial Hub and we are currently at the second stage this year.
1) The progress to promote Northeast Asian Financial Hub seemed to carry on smoothly with the support from the government and local autonomous entity. However, this progress is still well behind compared to other competitive countries and there are improvements to be made in creating a strong foundation for the financial hub.
2) According to a recent survey held by the Korea Institute for International Economic Policy (KIEP), the most important category in assessing the competitiveness of Financial Hubs in Seoul, Shanghai, and Beijing is internationalization and potentials for growth. This assessment shows that Shanghai is more competitive than Seoul in terms of internationalization and potentials for growth.
- In order to further promote a Financial Hub in Northeast Asia, continuous efforts to improve regulations should be made along with elevating the standard for internationalizing local financial companies. Moreover, the government should also actively support local financial companies in penetrating the global market for the financial industry to grow.
- Since there are limitations for governments to force the upbringing of a financial hub, it is more appropriate to understand the market and promote a ‘Down-to-top’ development strategy for the financial industry.
1) Competence for risk management needs to be expanded by increasing the flexibility of the financial market through improvements on regulations for new product development. Moreover, there needs to be additional listings of index funds in the forward stock market and additional plans for approval of hedge funds.
2) In particular, global financial players and financial experts in the upper-management level need to be nurtured through internationalization of financial institutions and fostering of major investment companies.
3) Central government’s role for inducing investment and alleviating regulations is essential to promote a financial hub. However, creating a strong linkage between the central government and local governments is more important since local autonomous entities are highly involved in creating life environment and cluster.
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