China has developed a five-year plan to turn Shanghai into an international financial hub, relying on a foreign recruitment drive to increase its financial sector workforce by 40 per cent.
Shanghai has long-held ambitions to create a finance district capable of rivalling the likes of New York, London and neighbouring Hong Kong but has struggled with finding enough skilled financial professionals, especially high-level managers and sector specialists.
The news comes at the same time as economists forecast a loss of 27,000 jobs in London's Square Mile by the end of 2011.
According to the "five-year plan for human resources development in Shanghai's financial sector" released this week, China's second biggest city aims to take on 90,000 financial employees, 70 per cent of whom would have a BA degree degree and 15 per cent an MA degree.
This would mean that by 2015 Shanghai would have a total number of 320,000 employees working in finance, if things go to plan. As things stands, less than two per cent of Shanghai's total workforce work in finance, compared to 10 per cent in New York. An improved medical care system, social insurance, and children's education services have been built into the plan in a bid to lure expats who would have previously favoured Singapore or Hong Kong.
A British Expat, who has been running his own education company, in China since 2003 said: "If it has been decreed by the government it will probably get done.
"As China drives towards an economy fuelled by domestic consumption, then they will have the opportunity to put in place huge incentives to make things work for firms that are keeping the money onshore.
"Logistically, Hong Kong was the gateway to China but now China is open, it’s almost superfluous and only has the advantage of the legal system left over from the UK."
Shanghai's income tax rates appear to present the main stumbling block: they are as high as 45 per cent in certain cases. Compared to Hong's maximum of 15 per cent and Singapore's 20 per cent, it means exceedingly generous expat packages will be required to coax financiers across the waters.
Coupled with this is new legislation that will require expat workers and their employers to pay into China's social welfare pot, although it is yet to be made clear exactly how much of their salaries they'll be required to hand over.
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