Regional rival threatens Hong Kong

Shanghai has the feel of a city on the rise

By Francis Markus BBC Shanghai correspondent

On the promenade above the murky brown water of Shanghai's Huang Pu river, thousands of Chinese and foreign tourists mill around, gazing across at a vision on the other side.

It's a vision of the future; soaring towers of glass, chrome, concrete.

The Chinese government hopes this futuristic, newly-created financial heartland will become a leading regional centre.

While Hong Kong's economy has been sagging, Shanghai has been radiating a tangible sense of a city on the rise.

Where once Hong Kong attracted job seekers with its legendary wealth of opportunities, now increasing numbers from there are gravitating to Shanghai to find a living. Whole companies are moving their regional headquarters here.

Short of expertise

But despite the over-riding feel good factor in Shanghai, Hong Kong's worries about being eclipsed by this city may in some senses be premature.

Shanghai's role as a would-be financial centre is still hamstrung by the fact that China's currency has yet to become freely convertible.

The city's stock market, one of two in mainland China, is still in its infancy, compared with that of Hong Kong.

And analysts say that Shanghai has a long way to go before the financial expertise and human infrastructure to rival Hong Kong are in place.

But Shanghai's mayor and other senior officials are in Paris this week to make the city's presentation to host World Expo 2010.

People here are hoping that if Shanghai can secure that trophy for China, as well as Beijing hosting the 2008 Olympics, it will generate a momentum that will be well nigh unstoppable.