The changing geographies of financial centres in China: The case of commercial banking

Abstract

This paper discusses the geographies of commercial banking in China. To understand the changing geographies of financial centres, this paper uses an empirical approach to highlight the changing spatial distribution of banking to the existing collection of empirical descriptions, and by an investigation of its spatial concentration over the period between 2006 and 2014. The empirical analysis is based on branch and sub‐branch data, employment data, headquarters data, and banking assets data, all of which are available, allowing a systematic geographical analysis of commercial banking. The findings reveal the status of Beijing and Shanghai as primary banking centres, as well as a hierarchical network of domestic banking centres and a growing spatial concentration within China's banking system. More specifically, Beijing is the predominant banking centre, while Shanghai retains its status as a capital for foreign banking. The rise of provincial banking centres in addition to Beijing, Shanghai, and Shenzhen has contributed to the formation of a hierarchical network of banking centres at national level. Accordingly, the development of first‐ and second‐tier banking centres has led to an ascending geographical concentration within China's banking system.

The Assessment of Industrial Agglomeration in China Based on NPP-VIIRS Nighttime Light Imagery and POI Data

“…These major cities serve as economic and political centers and have welldeveloped financial policies that have attracted a multitude of financial institutions. This concentration has not only promoted the growth of financial GDP but also resulted in higher financial location quotients [51]. Additionally, the result indicates that several cities in the northwest, notably Lanzhou and Gannan in Gansu province (black points 5, 6 in Figure 5f), exhibit a high financial industry location entropy.…”

“…Cities with higher GDP values in both industries are primarily concentrated in the large eastern cities. Beijing, Shanghai, and Guangzhou (red points 1, 2, 3 in Figure 3f,g) are the economic and commercial centers of the country and have all achieved a financial GDP value exceeding CNY 200 billion, hosting a great number of corporate headquarters, financial institutions, foreign investments, and a large concentration of talents that promote the development of finance in local and surrounding cities [51]. Moreover, due to the close connection between the estate and finance [52], the growth in finance has also driven the development of the estate industry.…”

Income Inequality, Finance, and Space: A Cross-Country Analysis

“…There is a rich literature discussing differences between centralized and decentralized financial systems, with the United Kingdom and France as examples of the former, and the United States and Germany of the latter (Wójcik and Mac-Donald-Korth 2015;Verdier 2002;Klagge and Martin 2005;Grote 2007). Beyond advanced economies, research shows relatively centralized financial systems in Central and Eastern Europe (Brülhart 2006) and Latin America (Aroca and Atienza 2016;Contel and Wójcik 2019;Ioannou and Wójcik 2022), and a more decentralized system in China (Wang 2018). Of course, the relative centralization or decentralization is a matter of degree, not a dichotomy, and is related intrinsically to the urban structure of a given country and economic, social, and political factors that have shaped this structure.…”