The city of Los Angeles reached a critical historical rating on the Global Financial Centres Index (GFCI), a ranking based on instrumental factors and data from an online survey. Previously ranked seventh, Los Angeles has overtaken Shanghai to the sixth position, while the Chinese city moved down a notch to the seventh.
Key Factors Driving Los Angeles’ Growth
LA is home to some of the biggest Fintech companies, attracting global talents and funding various government and private-public projects. With many L.A. residents looking for the best Forex Broker 2024 is sure to be a busy year for those in trading and many other services covering different niches in finance. Local authorities are invested in innovation for growth, driving the economy with a massive reliance on technology.
A seismic shift in the coveted spot shows L.A.’s growing strength as a global financial hub, unsurprisingly, given its meteoric rise as a leader in economic and innovation. The city benefits from decades of intentional investments and infrastructural planning, a dogged entrepreneurial spirit, and a technology-driven economy.
The new ranking is of little surprise for experts conversant with L.A.’s drive to be a central global financial hub and is, in fact, a testament to the city’s hard work. However, various other factors also contribute to the rankings.
How the Global Financial Centres Index Works
The Z/Yen Partners and the China Development Institute publish the Global Financial Centres Index ranking. This is a 120-city list ranking global financial centers based on 153 quantitative factors derived from authorities like the World Bank, The Economist Intelligence Unit, the OECD, and the United Nations.
The GFCI is released two times a year and considers responses to 10,000 questionnaires administered to experts and captains in finance and related industries. The GFCI ranks countries across various categories according to their international and local strengths.
The GFCI 33 (released in March 2023) ranks the following cities in the top ten list in that order:
- New York, US.
- London, UK.
- Singapore.
- Hong Kong, China.
- San Francisco, US.
- Los Angeles, US.
- Shanghai, China.
- Chicago, US.
- Boston, US.
- Seoul, South Korea.
New entrants to the top ten include Seoul, Boston, and Chicago, which displaced Beijing, Shenzhen, and Paris. New York, London, Singapore, and Hong Kong retained their top four positions in that order. At the same time, San Francisco and Los Angeles completed the five U.S. cities on the list, making the U.S. the country with the highest number of globally ranked top ten financial centers.
Source: Hyungnam Park from Pixabay
Los Angeles: Entertainment and Finance
Steeped in a modern architectural style, the city of Los Angeles, which is famous as the world’s entertainment capital, is also pulling its weight in the financial sector. L.A.’s music, T.V., and movie industries rank among the best globally and contribute significantly to the local economy. The city’s financial industry attracts top talents and experts worldwide and is tech-driven, driving innovative changes across other sectors.
The local government is also committed to encouraging local businesses. Speaking at an event to convene a Small Businesses Cabinet, Los Angeles Mayor Karen Bass said they would continue “to be responsive and cut through red tape at City Hall.”
Stephen Cheung, CEO & President of Los Angeles County Economic Development Corporation and a Cabinet member, expressed the Cabinet’s delight in working with the Mayor on “shared priorities to further open Los Angeles for business.”
Los Angeles also benefits from flexible regulatory policies that attract financial firms and investments from local and foreign investors. However, LA’s biggest strength is its diversification strategy, which ensures the economy is driven by various industries and not concentrated on a few. The city’s potential to be the top financial center is massive, as it attracts forex brokers and a diverse range of financial services providers across different niches.
With the U.S. inflation slowing, the economic outlook is positive, and there are growth predictions for L.A.’s $250 billion creative economy to boom. The city’s Fintech industry attracted over $296 million in investments in 2023 alone.
Shanghai: Driving Growth in China
Source: Dmitriy via Pixabay
On the other hand, Shanghai heavily depends on a few traditional industries but is also embracing and driving technological innovations in payments, loans, and other financial services and products. This city has a young population and talent pool and continues to attract foreign investors.
Adopting the Digital Yuan and the potential impacts of the BRICS partnerships is expected to open up Shanghai and other Chinese cities for economic growth, and the financial industry will naturally lead. Shanghai, Hong Kong, and Beijing are essential cities to China’s economy, significantly contributing to the nation’s GDP.
Like LA, Shanghai boasts a well-educated workforce, developed social infrastructure, innovation hubs, and a highly efficient city transportation system. These are crucial for activities that drive growth and confidence in the economy.
March GFCI Ranking To See Cities Move Up
The GFCI 35 is set for release in March 2024; we can expect a few surprises as many cities move up the ranking list and even break into the top ten. New York and London are expected to retain the top two spots, leading the global financial services and products markets. Whether LA moves higher on the ranking or drops below Shanghai, the two cities remain fierce competitors in the economic and entertainment industries.
