Financial markets and institutions. A comparison of China and international financial centers

Introduction

International Finance Center (IFC) are an integral part of the modern international financial economy. One of its basic components is the availability of developed national financial markets, actively interacting with similar markets in other countries. As an example, the United States can lead the UK, Japan, in economic development which play an important role the financial markets, and the major cities of these countries (New York, London, Tokyo), are the major international financial centers. Cities can be seen as the gateway to the global economy. They are important for the functioning of both national and global economy, since they are concentrated huge financial, informational and intellectual resources, based most of the major industrial, commercial, financial and service companies, specialized credit and financial institutions and banks.

In addition to traditional MFC in the last decades of the 20th century a number of new financial centers competing for the role of international. The acceleration of globalization and especially its financial component, led to an increase in strength and influence regional financial centers, in particular, such as Hong Kong (Hong Kong). The financial market of China, which is traditionally considered to be emerging financial markets have long been a mature international financial centers that have an impact not only on the regional economy, but also in the distribution of global capital flows.

The study of the functioning of the MFC, their development trends is the most important area for the understanding of the new global economy, its characteristics and movement mechanisms. At the same time identifying new trends in the development of Asian financial centers, particularly their inclusion in the competition for international corporations have mastered the financial market, is both scientific and practical interest. This makes it possible to identify local features of financial globalization as a result of the connection and the active development of the Asia-Pacific Economic Space with new financial centers, show their role, prospects and competitiveness in the global economy. Of particular importance is the study of the development of Chinese financial market, especially given the fact that the IMF has recognized the yuan a freely usable currency, reflecting the expanding role of China in world trade, a significant increase in the use of the yuan in the international scale and the growth of operations with it.

Currently questions on the problems and prospects of China's participation in global financial markets are becoming increasingly important. The growth of economic power and the leading role of China in world trade entails increasing the participation of the Chinese renminbi in international transactions and payments, the rapid increase in foreign exchange reserves of the country and its foreign investments. With the active participation of Chinese financial resources in 2014 created a new international financial organizations - Asian Infrastructure Investment Bank and the New Development Bank (with China's share in these institutions, respectively 41 and 50%) (Cohen and Chiu, 2014).

According to leading financial experts of the world, China, together with Russia and other BRICS countries are gradually building a new global financial structure that is both parallel and competing against the existing finance structure, controlled by the West with the help of SWIFT dollar and systems (Zhang, 2016 ).

All these processes reflect the strengthening and expansion of China's participation in global financial markets. However, along the way there are some problems that do not allow you to uniquely determine the future of this country a place in the global financial system.

Financial centers and financial markets today: categorization, trends, and prospects

Global financial centers - centers of attraction of capital from different countries and regions of the world, global management of cash flows and financial assets. They play the role of a tank and pump in money circulation, like the heart in the circulatory system. At the same time Global financial centers produce new financial instruments, carried out the conversion of financial assets.

There are different categories of financial centers of world significance. London-based Z / Yen Group - the creator of the most popular index of global financial centers separates them: international; transnational; regional.

Economists identify (Petrus et al, 2016.)

- Global financial centers (New York, London, Tokyo)
- Zone financial centers (Singapore, Hong Kong, Paris, Los Angeles);
- Regional financial centers (Sid- her, Chicago, San Francisco, Dallas, Miami, Honolulu)

In our opinion, the financial centers can be divided into the following categories: Global (London and New York); regional (Hong Kong, Singapore, Frank-Furth am Main, Sydney, Chicago and Tokyo, and recently also in Johannesburg, Dubai and Shanghai); local, niche (offshore zones); specialized (Zurich and Geneva).

Some researchers distinguish three types of destination for financial centers (Zhao, Zhang and Wang, 2004):

- "Gates" on the capacious domestic capital market (New York);
- "Geographical location" for cross-border transactions of customers from around the world (London);
- "Financial ghetto" (offshore centers).

The role of the world's centers of changes over time, although the process of "conversion" is a long.

Currently, calculated number of general international indices with which to assess the level of development of the world financial centers.

1. The index of global financial centers (Global financial centers index, GFCI) is calculated London commercial research center Z / Yen Group and since 2007 is published 2 times a year, the municipal administration of the City of London - London City Corporation (City of London Corporation).

The index is based on 60 partial indices, which are grouped into: 1) "people» (People):

- Qualification of the workforce and its accessibility;
- The flexibility of the labor market;
- Quality business education;

2) "Business Environment» (Business Environment):

- Government regulation;
- The level of taxation;
- The level of corruption; - The degree of economic freedom;
- Administrative barriers of doing business;

3) "infrastructure» (Infrastructure):

- The cost of renting premises,
- The availability of transport services;

4) "availability of markets» (Market Access). evaluated:

- A variety of financial instruments (shares, bonds);
- The volume of transactions with them;
- The level of market clustering;

5) "overall competitiveness» (General Competitiveness): - price level - quality of life and economic comfort (Cheung and Yeung, 2007).

Over the period 2007-2016 four leading positions successively occupied by London, New York, Hong Kong and Singapore, and the difference between them is getting smaller. At the same time there is an upward growth of Asian financial centers. For 5 years, Shanghai and Beijing have risen by 19 and 17 places up, South Korea Seoul - 32 positions (of which 30 - in the last year). However, the position of the Chinese Shenzhen has deteriorated markedly. According to survey respondents, 4 Asian cities (Shanghai, Singapore, Seoul and Hong Kong) are most likely to strengthen his power (of Zhang, 2016) in the coming years.

2. The index of the development of international financial centers (International Financial Centers Development Index, IFCD) - calculated by the Chicago Mercantile Exchange (Chicago Mercantile Exchange) and by Dow Jones (Dow Jones & Company), together with the Chinese news agency Xinhua (Xinhua News Agency) from 2010. Evaluated 45 financial centers, using objective indicators and subjective assessments. As the City of London and the index, the index of Xinhua-Dow Jones is published twice a year. For developing financial centers, three additional index developed:

1) Confidence (confidence index);
2) the index of the attractiveness of capital and human resources (capital and human resources attraction index);
3) recognition of the index currency (currency familiarity index) - for the BRICS countries (Brazil, India, Russia, China, South Africa).

Studies for two years show that Shanghai has the best chance in the near future to become an international financial center for most indicators (Zhang, 2016).

The modern global financial system is an ordered space in which the role of key players sufficiently clearly defined. This ordering ensures coordination mechanism, resulting in global capital in motion. Of course, the financial and economic crisis undermines the institutionalization of the system, making the unstable position of some participants and creating new opportunities for others. The investigation of the competitive advantages and vulnerabilities of the world's leading financial centers, which allows us to understand how the statics and dynamics of this system.

London - the oldest financial center with the developed stock markets and banking, asset management portfolios of securities and insurance system. The London Stock Exchange is the 4th largest in the world in terms of capitalization, HSBC Holdings and Bank - 3rd place in terms of assets. UK banking sector has the highest level of internationalization, with the majority of foreign banks and their branches located in the City of London (Dhingra, 2016). According to the foreign assets of the banking sector of the UK holds a leading position in the world. Also, London - known as a center of trade in goods and derivatives on them. London Metal Exchange (London Metal Exchange) - the world's largest stock exchange, specializing in the sale of non-ferrous metals and plastics, as well as hedging transactions with them. Despite Brexit, London is one of the most attractive for foreign direct investment cities in Europe, published by the company Ernst & Young (Dhingra, 2016). Loss of London rather difficult world financial center status to imagine, though nothing can be ruled out. Currently, the British capital is leading in almost all criteria: in the world of bond trading, foreign assets, in the conduct of foreign exchange operations and the implementation of international borrowing in the asset management of wealthy people from around the world.

In France and Germany there is a desire to move European financial center or in Paris or Frankfurt. In Paris, for example, has announced the introduction of tax incentives and the creation of the service "one stop shop" for visitors to the country bankers. However, there are a number of reasons why the leading financial center status must still retain it to London. In the UK financial sector accounts for 10% of the British GDP - more than the US and Japan. This sector provides about 11% of all tax revenues in the state budget. The loss of global financial leadership status can be fraught with serious consequences for the British economy. Therefore, the government will do everything to support the financial sector (Dhingra, 2016).

New York - the largest international financial center in the world, where the focus headquarters known US financial institutions: Citigroup, J.P. Morgan Chase & Co., American International Group, Goldman Sachs Group, Morgan Stanley, Merrill Lynch et al., As well as many non-financial corporations. In this financial center are the two largest stock exchanges of the world: New York Stock Exchange (where listings about 2 800 companies) and NASDAQ. According to the management of collective investment New York has no equal in the world. For example, at the disposal of the collective and mutual funds is the US capital of approximately trillion. USD. that was 70% of GDP (Dhingra, 2016).

Meanwhile, New York became assign its position as the world financial center of London in 2002 after the adoption of the Sarbanes-Oxley Act, to tighten control over financial reporting and to strengthen the protection of shareholders' rights, as well as due to the activation of the new immigration rules.

Frankfurt am Main. This is especially the largest banking center in the banking sector, which employs about 74 thousand. pers., which manages 2.951 trillion euro bank assets (Dhingra, 2016). The city also operates the largest stock exchange in Germany Frankfurter Wertpapierbörse, now part of the Deutsche Börse. She co-owns with the Swiss exchange futures platform Eurex, one of the largest operators in the derivatives market. Despite the fact that Germany is better than other developed countries overcome the consequences of 2008-2009 financial crisis, the debt problems in other European countries (Greece, Spain, Ireland and others.) Lead to fluctuations of the euro against the dollar, which negatively affects the financial German market.

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