The wide gap in financial development between cities in the Asia-Pacific region and traditional financial centers in the West is narrowing, according to a recent report.

The latest Global Financial Centers Index shows that of the top 20 financial centers across the world, those from the Asia-Pacific region accounted for more than one-third, with Hong Kong occupying fourth position.

Shanghai ranked 13th, up three spots from the previous ranking, while Beijing advanced 10 spots to number 16.

Sydney moved up by three spots and Osaka by two spots in the rankings.

The index, published on March 27, was compiled jointly by Shenzhen-based think tank China Development Institute and London-based market research company Z/Yen Group.

The latest findings were based on a number of indicators, including business environment, development of financial sector, infrastructure, human capital and city reputation, as well as feedback from 3,008 respondents.

While London, New York, Singapore, Hong Kong and Tokyo remained the world's top five financial centers, London and New York saw their scores drop significantly, by 13 and 14 points respectively, as a result of the pending exit of Britain from the European Union and the presidential election in the United States.

That led to the gap between Singapore and New York narrowing to 20 points, from 42 in the previous index, the report shows.

"Brexit has been the main source of uncertainty, and it has not only exerted an impact on London, but also other financial centers. Meanwhile, rising protectionism is causing more concern," says Liu Guohong, director of the institute's Finance and Modern Industry Research Center.

In all, 88 cities were included in the index. Among them, six were Chinese mainland cities: Shanghai, Beijing, Shenzhen, Guangzhou, Qingdao and Dalian.

"Among the six mainland cities, Beijing has shown a significant advance in its ranking. That is because of great improvement in its infrastructure such as the rail transit network and telecom facilities and rapid development of its financial industry," says Yu Lingqu, a researcher from the institute.

Yu says the Belt and Road Initiative had brought fresh opportunities for the Chinese capital to develop its financial sector. Also, the New Third Board, which is the share transfer system for small and medium-sized enterprises, has also been growing at a fast speed, with tens of thousands of enterprises listed on the board over the past one or two years, he adds.

Although Shenzhen remains in 22nd place among the 88 cities, Liu has high expectations for its potential.

"Shenzhen still has a lot to improve in its business environment, infrastructure and human capital. But the great potential lies in its links with Hong Kong," he says.

"Hong Kong is expected to play a bigger role in the opening up of the Chinese mainland's service industry. Shenzhen could benefit from the process by developing cross-border finance with the Asian financial hub," he adds.

"Moreover, it could take advantage of its geographical proximity to Hong Kong to introduce more Hong Kong professional staff, so as to increase and upgrade its talent pool and help itself grow."

sally@chinadailyhk.com