SHANGHAI - A recently released financial index ranks Shanghai as the world's No 6 financial center, two positions behind Hong Kong.

Experts said mature market regulations and more diversified investment channels are necessary to boost the city's competitiveness.

According to the Xinhua-Dow Jones International Financial Centers Development Index, which ranks financial centers worldwide, Shanghai moved up two places from last year to No 6. [Photo/Agencies]

It is the second year that the Xinhua-Dow Jones International Financial Centers Development Index (IFCD Index) has been published, and Shanghai moved up two spots from last year, surpassing Paris and Frankfurt. Beijing was ranked 14th and Shenzhen was 21st.

The traditional financial centers of New York, London and Tokyo remained in the top three positions in this year's list.

Michael Petronella, president of the Chicago Mercantile Exchange (CME) Group Index Services LLC, said he believed the results clearly reflect China's growing economic prominence on the world stage.

In 2010, China overtook Japan as the world's second-largest economy. Goldman Sachs predicted that at its current rate of growth, China will dethrone the United States as the world's largest economy by 2027, and PricewaterhouseCoopers (PwC) said it could happen as early as 2020, Petronella said.

"The capital market, particularly the stock market in Shanghai, will become the largest in the world soon," said Jiao Ran, director of the economic information editorial department of Xinhua News Agency.

"The ranking mirrors the status quo of the world's major financial centers, particularly as the top three positions are still held by the traditional financial centers," said Liu Shengjun, deputy director of the Lujiazui International Finance Research Center, which is affiliated with the China Europe International Business School.

"I agree with most of the index except for Tokyo's position," Lu Hongjun, president of Shanghai Institute of International Finance, told China Daily. "Owing to Japan's current economic status, its internationalization, and the recent earthquake and nuclear emergency, Tokyo is much less prominent in the global financial market," said Lu.

Lu said Shanghai's rise is in line with the city's achievements over the past year.

Qi Xiaozhai, director of the Shanghai Commercial Economic Research Center, said that the city's efforts to build a global financial center and shipping hub have been recognized by the world.

However, he warned that the city is still a long way from challenging the dominance of the traditional financial hubs. "Shanghai should improve many sectors such as trade, industry, service, and education," he said.

"In addition, market supervision and transparency still lags far behind some Western markets," said Liu of the Lujiazui International Finance Research Center.

The list comprises 45 international financial centers. The top 10 are New York, London, Tokyo, Hong Kong, Singapore, Shanghai, Paris, Frankfurt, Sydney and Amsterdam.

On the basis of 66 indicators and 2,073 questionnaires, the IFCD Index chose 45 famous financial cities as samples, and set up a comprehensive evaluation system. The objective indicator system rates international financial centers by five aspects - the financial market, growth and development, industrial support, service and the general environment.