Offshore Capitalist

Asian cities catch up with London

Asian cities are closing the gap on London and New York in a ranking of competitiveness among the world’s leading financial centres in which they now hold five of the top 10 spots.

The Global Financial Centres Index, compiled twice yearly by the Z/Yen Group think-tank and published by the City of London, combines a survey of financial professionals with factors such as office rents, airport satisfaction and tax rates.

London has topped every survey since it began three years ago, and continues to lead in four of five financial sub-industries, although New York is number one in banking.

Both London and New York improved their overall scores since the March ranking. London added 9 points to reach 790 and New York rose by 6 points to 774 out of a possible 1,000.

But their single-digit gains were dwarfed by the 45 points added by Hong Kong and Singapore’s 32-point rise. All four cities now have scores in the 700s, leading the study’s authors to suggest that a global group of four has emerged from the pack – a sharp change from early surveys, when London and New York were far ahead of the rest.

London remains in top place, 16 points ahead of New York (from 13 points in GFCI 5). The financial crisis has had a significant impact on both centres but they remain ahead of Hong Kong and Singapore. London remains in the top quartile of nearly all instrumental factors and leads all industry sector sub-indices except the Banking sub-index, where it is 2nd to New York. London leads in all areas of competitiveness.

New York has gained 6 points since GFCI 5 and remains in the top quartile in over 80% of its instrumental factors. New York is 2nd in all sub-indices except the Banking industry sub-index where it is in 1st position. We have long argued that the relationship between London and New York is mutually supportive and a gain for one does not mean a loss for the other.

Before the crisis, a level of competition between the two centres was very evident. Whilst many industry professionals still see a great deal of competition, policymakers appear to recognise that working together on certain elements of regulatory reform is likely to enhance the competitiveness of both centres.

Hong Kong continues to thrive and has risen by 45 points since GFCI 5. It has also regained 3rd place in GFCI from Singapore (which was ahead in GFCI 4 and 5). It is in 3rd place in all areas of competitiveness and 3rd in the banking, asset management and insurance industry sector sub-indices.

Singapore has been climbing steadily in the GFCI ratings and has risen by 32 points in GFCI 6. It is 4th place in all areas of competitiveness and 3rd in the professional services and Government & Regulatory industry sector sub-indices.

the Report

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