The provincial capital is not often thought of as a financial center. It doesn’t have a stock exchange of its own, and financial services comprise less than one-tenth of GDP. This contrasts with Hong Kong and Shenzhen, where financial services contribute roughly twice as much (19%-20%) to GDP. Guangzhou, instead, has traditionally been known as an industrial powerhouse, dominated by state-owned enterprises in heavy industries and SMEs in export-oriented manufacturing.
Yet Guangzhou’s ambitions for developing financial services should not be underestimated. This is especially as the Nansha special economic zone is built out in the coming years (see our primer on Nansha, and its World Financial Island in Hengli). That is where a GBA International Bank is being built, and where a new Futures Exchange will be launched, initially trading carbon credits.
Indeed, Guangzhou is showing that a city doesn’t need to have a stock exchange to make its financial sector go. And with the rise of fintech, it remains to be seen how the entire industry will be shaken up to the point where traditional financial institutions and trading platforms will matter less than they do now.