China's President Xi Jinping announced that Shanghai's financial markets would be globalized through the Belt and Road Initiative last Sunday. He also urged the city to master the core links of the industry chains to prepare for globalization.
On November 3, 2019, China's President Xi Jinping announced that the country would globalize the Shanghai financial markets. He said, "The financial hub should courageously jump into the ocean of the world's economy and fight the storms to build strong tendons and strengthen the bones," reported Reuters.
The announcement came after China expended the Free Trade Zone (FTZ) in Shanghai. The city is now the center for the development of onshore and offshore businesses. The President also iterated that this would solidify China's role in engaging with overseas corporate deals and future plans.
In other news, Financial Times reported that China is the world's best performing major stock market this year. The CSI 300 also improved by a third in 2019 and the investors are showing greater interest in China's stock market amidst the China-US trade war.
Despite the country's slowing economy, Shanghai and Shenzhen increased China's market capitalization to $1.4 trillion. As a whole, both cities have a total value of onshore equities to $6.8 trillion. This revived domestic investor confidence and continues the influx of international inflows.
Additionally, despite its renminbi, China's stock benchmark also improved to a total of 28 percent in dollar terms. There is also a 31 percent advance by the index of both city's stocks compared to US's S&P 500 which gained 22.3 percent, Japan's Topix at 11.5 percent, and UK's FTSE 100's 8.5 percent.
In 2018, China's CSI 300 fell by 25 percent. The improvement made up for the resurgence despite being named as the worst-performing country in the market last year. The cause thereto was the intensified trade war between the US and China and the campaign by Beijing that constricted its domestic liquidity.
According to an analyst at CMC Markets Singapore Margaret Yang, Shanghai's financial market has experienced an impressive comeback. It has growing retail investors who lead in mainland China's stock markets when the shares were labeled undervalued last year.
Amidst the trade war, China has eased up on its consumption thereby helping the government neutralize the conflict it has with Washington. At present, Beijing has strengthened its negotiating power in the trade war.
She added that people's confidence in China's position in the trade war has significantly improved and maintained steady inflows despite tariff threats on goods imported from China.
