Shanghai unveiled an ambitious blueprint to strengthen its position as a global asset management hub, setting a target of 55 trillion yuan ($8.12 trillion) in assets under management by 2030 — equivalent to one-third of the national total — as it seeks to enhance the global allocation and risk management functions of renminbi-denominated assets.

The General Office of the Shanghai Municipal People's Government announced on Tuesday that it recently issued guidelines to deepen the development of Shanghai as a global asset management center. The policy, which took effect on Monday, focuses on the overarching goal of enhancing the global allocation and risk management functions of renminbi-denominated assets.

The guidelines aim to promote two-way circulation between domestic and international markets, with key efforts concentrated on strengthening the financial market system, improving the service capabilities of asset management institutions, and fostering innovation in products and services.

The objective of the guidelines is to further advance the high-quality development of Shanghai's asset management sector, strengthen the dual engines of asset and wealth management, accelerate the internationalization of the renminbi, facilitate diversified domestic and overseas asset allocation, enhance Shanghai's role in the global allocation and risk management of renminbi assets, and reinforce the competitiveness and influence of Shanghai as an international financial center, the General Office of the Shanghai Municipal People's Government said.

The document calls for enriching the supply of foundational financial market products. It supports listings and mergers and acquisitions by technology companies with strong innovation credentials, expands issuance of free trade zone offshore bonds, Yulan bonds, panda bonds, and sci-tech innovation bonds, and aims to make Shanghai the preferred national venue for the issuance and trading of real estate investment trust products. It also encourages wider use of supply-chain bills, accelerates the development of real estate trusts and equity trusts, and optimizes the supply of alternative assets.

Shanghai will also improve risk management instruments in the futures and derivatives markets. The city plans to accelerate the launch of liquefied natural gas futures and options, prepare for the development of electricity futures and computing-power futures, and steadily expand the shipping index futures product lineup. It will promote the listing of products such as the STAR 50, Shenzhen 100, and ChiNext stock index futures and options, as well as government bond options. Authorities will also broaden the range of underlying assets and maturities for standardized interest rate derivatives and enrich offerings of equity- and interest-rate-related futures and options. Shanghai will expand the range of currencies and products traded in the foreign exchange market, explore pilot programs for renminbi foreign exchange futures trading, and diversify exchange rate hedging instruments.

"Further deepening Shanghai's development as a global asset management center represents a precisely targeted move amid the accelerating internationalization of the renminbi," Jean Lu, chief executive officer and executive vice-chairperson of Standard Chartered Bank (China) Ltd, said. "The core of the renminbi internationalization 2.0 phase is the evolution from a single-function trade settlement currency to a multifunctional financial system, building a deeper, more liquid and more convenient cross-border ecosystem. The development of a global asset management center provides exactly the real, comprehensive, and sustainable application scenarios and ecosystem support needed for this evolution."

Shanghai has previously set the goal of establishing itself as a dual hub — a global allocation center and risk management center for renminbi assets. Lu said the newly released opinions represent a significant step forward in implementation, simultaneously advancing asset supply, risk management, investment channels, and financial infrastructure. The measures directly address overseas investors' systemic needs for investability, hedgeability, and financeability, she said.

"At present, the renminbi's position in the global monetary system remains underestimated and has considerable room for improvement. Breakthroughs have already been achieved in areas such as trade financing and payments, but the internationalization of the renminbi's asset allocation and reserve currency functions still does not match China's weight in the global economic and financial system. This is precisely the gap that Shanghai's global asset management center initiative seeks to close — ensuring that overseas institutions not only have channels to allocate renminbi assets, but also have the tools to manage risks and the scenarios to sustain long-term usage."

jiangxueqing@chinadaily.com.cn