This year, the startling development has been the arrival of major Wall Street players against the backdrop of increasing trade tensions between the US and China. Their arrival has been facilitated by bold steps taken by the Chinese government to liberalize financial markets.

In April, the China Banking and Insurance Regulatory Commission brought forward by a year the revocation of laws preventing foreign companies from taking full ownership of those operating in a number of areas, including fund management, futures trading and insurance.

JP Morgan is in the process of completing a $1 billion buyout of its joint venture partner to take full control of fund manager China International Fund Management, while Blackrock, the global fund manager based in New York, was given approval in August to operate a wholly-owned fund management business.

Morgan Stanley, another US investment bank, announced earlier this year it had taken control of its securities joint venture.

European moves

European companies are also making moves on Shanghai. Mark Tucker, chairman of HSBC Holdings, the global investment bank headquartered in the United Kingdom, said in a speech in Shanghai on Oct 18 the bank was looking at business opportunities in the city.

Dariusz Wojcik, professor of economic geography at Oxford University, said US companies coming to China at a time of trade tensions between Washington and Beijing is not quite the paradox some assume.

"The presence of US and other foreign financial institutions in China is still small, while demand for sophisticated financial services is growing fast and cannot be met by domestic firms. As such, the Chinese government does not fear the presence of foreign financial firms," said Wojcik, co-author with Youssef Cassis of International Financial Centres after the Global Financial Crisis and Brexit.

"For the US government, the expansion of US firms in China is not a big issue either, as it helps these firms financially, without any job losses in the US."

Koh King Kee, president of the Centre For New Inclusive Asia, a think tank based in Kuala Lumpur, the Malaysian capital, said US companies are being lured by the massive opportunities arising from China's recent liberalization.

"China's financial sector has lagged behind in its reform and opening-up compared with other sectors. With a high savings rate, expanding consumer market and a $25 trillion growing economy, the potential for China's retail and investment banking is unbelievably huge," he said.

Koh said Wall Street companies also know they have the expertise that does not yet exist in China, and want to take advantage of it.

"While technological know-how can be obtained through training and education in colleges and universities, experience and networking are more important in the financial world. This is why Wall Street has an edge over China's Main Street," he said.