Current transformations of the Chinese economy and the growing implication of its businesses in the world market will necessitate the creation of a high level financial hub where will be processed its transactions with foreign countries. This hub is already found: it will be Shanghai.  Yuan internationalization, launched almost ten years ago, in a general indifference, and even a denial, as in France, is going on and even is accelerating. Monetary bumps occurred last year when China central bank decided to modify its intervention procedures with a certain clumsiness caused by its inexperience, are now part of the past. The inclusion of the Yuan in the IMF basket of currencies went through without difficulties and during the previous weeks, the Chinese currency has not been specially affected by the turbulences which followed the Brexit, with a fall of the pound, and Donald Trump election with the rise of the dollar. Between 2012 and the middle of 2015, the Yuan-dollar exchange rate staid almost unchanged, around 6.20 and the Chinese currency rose against the euro. Since mid-2015, these trends have been reversed: the Yuan did not anymore follow the rise of the dollar and stabilized against the euro around 7.20 Yuan for one euro, even when the dollar rose again after Donald Trump election.

So China central bank has managed its exchange rate with pragmatism and, obviously, is preparing, a new step in the liberalization of capital flows in offering the convertibility of the foreign  detained assets in Yuan. The creation of a real unified Chinese exchange market is foreseeable and its location, Shanghai, is already known where along with the stock market, are issued by foreign companies bonds denominated in Yuan, the “panda bonds”, to finance their investments in the area. Until now, these issuances were essentially done in Hong Kong. Time is now near when most of the transactions denominated in the Chinese currency will be brought together and when direct connections are created with the western financial centers, London, New York and Paris with which an agreement in principle has been concluded. Hong Kong and Singapore stopovers won’t be any more required.

The second transformation of the Chinese economy is about the growing role of financial markets in the financing of the businesses. Listings increased these last years, in Shanghai as in Hong Kong. Since the beginning of the year, Shanghai, with 12.8 billion dollars was ahead of New York, with 11.7 billion. Shanghai and Hong Kong markets will become more and more connected and soon, the restrictions against non-residents to buy Chinese shares will be lifted. Hong Kong listings will lose most of its interest. Chinese companies, to finance their development or to make acquisitions in their own country or abroad will increase their use of financial markets. It will be the same when they participate to majors infrastructures projects as those which are part of the Belt and Road Initiative, launched by the government. Until now, everything was decided in Beijing since it was the State which had the last word. The ascension of the private sector, which was spectacular during the last five years, and not only because of Alibaba and on-line sales, with tourism and the production of consumer goods, generates, as a consequence, the development of market operations: listings, emissions of shares, mergers and acquisitions. There are about 1200 companies which are listed with a total market capitalization of above 4 000 billion dollars. Shanghai stock market is already the 5^th biggest center and it is the beginning. It has regained its stability after the 2015 summer crash, caused by local speculation and has almost recovered the level reached at the beginning of this year. The city begins to take a large benefit of its financial role. It accommodates the management of listed companies and even sometimes, their headquarters. Chinese banks have located there the teams in charge of market activities which are going to grow very rapidly along with the financial liberalization of the country. Their foreign competitors intend to participate, like HSBC. A tower, built in the new Pudong district, on the other side of the Huangpu River which crosses the city, carries its logo and shows the will of this establishment, which plaid a historic role in the area, to regain its former position. Major audit firms, like Deloitte or KPMG, were not long coming, as the great Anglo-Saxon law firms. A financial hub is not only a place where are listed and exchanged currencies or shares. It is a whole package of services dedicated to the realization of these transactions or of these market operations. It will necessarily be cosmopolitan, as are, and it is a reason of their success, London and New York. So, Shanghai is destined, in the near future, to become the first Asian financial center and is actively preparing to it. It will be a stunning revenge for a city which had a tumultuous past.

Based on Chinese historical scale, it is almost a new town. In Imperial China, the great political and military centers of power where located north of the Yang-Tze river. The South was the territory of the merchants which were not highly considered by the Emperor. There was only one exception. During the 12^th and the 13^th centuries, the Song dynasty established itself in the south, in Hangzhou, located at 200 kilometers from the current location of Shanghai. Hangzhou is still a highly symbolic place. It hosted the secret discussions with Henry Kissinger to prepare the recognition of China by the United States and, recently, the last G20 Summit. Shanghai will appear on China map only after the humiliating defeat of the country and the signature of Unequal Treaties which allocated to winners territorial concessions. The center of the city still carries the mark of this period with “Hausmanniens”, British and sometimes Art Deco buildings. The city was controlled, during a long period, by Tchang- Kai Chek partisans and had the reputation of being one of the last relics of capitalism in the country which will not be forgiven by Mao. Even when Deng Xiaoping launched his great reforms, he left Shanghai out of the process and he did not attribute to it a special economic zone status. Shenzhen and, a little north of it, Shantou, were chosen. We know today the essential role of them. It was only after the dramatic Tienanmen square events that everything changed. In his 1992 trip to the south, the Chinese leader gave, at last, its support to Shanghai development. He had appointed its mayor, Zhu Rongji, as vice premier minister. He will become prime minister shortly after and he will keep that position until 2003. The building of Pudong district, as a symbol of the modernity and of the architectural boldness of 21^st century China, could start. And the move is not about to stop, regarding the huge stakes which are ahead: to finance the companies of the second world economic power.