Risks of 'financial center' craze
Ningbo is just one of many Chinese cities dreaming of becoming a regional financial center; Harbin, Kunming, Hohhot, Chuangchun, Shijiazhuang, Taiyuan and Nanchang also have such ambitions.
In Nie's point of view, it will not be easy for them to realize those dreams. Liaoning Province's two big cities, Shenyang and Dalian, have both made such plans, yet it may be difficult for them to absorb enough capital because of the province's poor economic capability.
The financial industry is profitable. According to data cited by the report, 16 listed Chinese banks earned 346.2 billion yuan in the first half of this year, accounting for 50 percent of 1,829 listed companies' net earnings during the period.
In addition, local financial centers would also make it more convenient for governments to borrow money, an attractive option as the central government tightens its monetary policy.
But the hidden risks should not be ignored, experts warn. "If the financial industry becomes overdeveloped it could cause imbalance, and the risks taken by swelling local banking systems could be transferred to the head offices, and then to the Ministry of Finance, and finally become the burden of the country," concluded Pan.
