Beijing, 3 Sep. Shanghai has built a reputation as being the busiest, most vibrant, and most cosmopolitan city in China. Beijing, however, has gained unparalleled global exposure by hosting the 2008 Summer Olympic Games. Which can emerge as China’s preeminent metropolis?

In May 2008, the city of Beijing published an economic development plan which would make it the primary financial center of China. In response, Shanghai reinforced its existing position as the top financial city in the country by holding a seminar on the subject, inviting various leading financial executives and many leading international institutions.

“Beijing intends to become an important financial hub internationally and such considerations are based on the overwhelming developments seen everywhere recently in Beijing, particularly in infrastructure,” said Mr. Guo Hao, from the Beijing government. Currently, more than 10% of the GDP of Beijing is from the financial sector.

It will be hard for Beijing topple Shanghai’s financial status with the largest share market there, China’s (and once the world’s) busiest port, and a history of being the country’s financial center. The BBC even called Shanghai, “China’s Capitalist Showpiece”.

Shanghai’s financial subsectors are well established, and have national influence. Some of them are in currency exchanges, capital financing, reinsurance, gold, real estate, commodities, finance futures and more. Commenting on Shanghai’s subsectors, Qinghua University professor Li Jinliang said, “Obviously, Shanghai has a great edge on this front. It is not an easy thing to replace Shanghai in this regard.”

But the fact that the China Central Bank, Bank of China Insurance Company Ltd, Citic Securities Co. Ltd, and more than one thousand other financial institutions are in Beijing, puts the capital in a good position. Most of these are in the Beijing Finance Street area, which is 35 blocks of financial institutions and regulatory bodies. Other institutions there include China Construction Bank, Commercial and Industrial Bank of China, China Securities Regulatory Commission, Communication Bank of China, and China Banking Regulatory Commission.

Foreign firms are setting up on Beijing Finance Street too: Bank of America, UBS, Royal Bank of Canada, JP Morgan, and Goldman Sachs are a few.

The 2008 Summer Olympics reminded the world of not only China’s – but Beijing’s importance on the world stage. The most expensive Olympic Games ever brought tremendous attention to the country’s capital.

This global fame soon may be equalized by Shanghai with Expo 2010 which will be held there. In anticipation of this the infrastructure, especially the already-incredible train system, will meet or beat Beijing’s. More people are expected to attend the Shanghai Expo 2010 than any other in history.

Both cities have populations of about 18 million; both cities have per capita GDPs of about US $8,500. Both cities have excellent financial reputations.

If anything, Shanghai and Beijing should watch out for Hong Kong, which has a better legal system, more economic freedoms, a fully-convertible currency, and better banking system than either of the two contenders. But that’s another issue.

Chen Xiulian, EconomyWatch.com