A mild-mannered man with an economics doctorate from Stanford University carries a historic task in his portfolio as Shanghai continues its drive to transform itself into the City of London of the East by 2020.

Fang Xinghai, now in his mid-40s, heads the Shanghai Financial Services Office, which was set up in 2002 to draft local laws, regulations, supervision and policies needed to modernize the city's financial services industry.

Upon first meeting this modest Shanghai man with ancestral roots in the entrepreneurial city of Wenzhou in Zhejiang Province, one is struck by his academic air. He speaks slowly, thoughtfully and authoritatively. He has a firm grasp of all the details of his work and is careful to avoid ambiguity in his words.

In 2005, he joined a growing team of forward-looking Shanghai officials with overseas backgrounds after having previously worked at the Shanghai Stock Exchange, China Construction Bank, China Galaxy Securities Co and the World Bank.

Since then, he has played an important role in the city's financial reform. This week, he has been busy sharing views with local lawmakers and political consultants on how to push forward the city's financial sector at the annual session of the Shanghai People's Congress and the Shanghai Committee of the Chinese People's Political Consultative Conference.

On a chilly Shanghai morning, with a cup of Starbucks coffee in hand, he welcomed Shanghai Daily journalists into his 23rd floor office overlooking People's Square. The shelves in his modest office were crammed with books and dotted with family photos, including portraits of his almost three-year-old son.

During an exclusive one-hour interview, Fang shared his views on how efforts are proceeding to steer Shanghai's financial sector to the forefront of world business and further open up the city's markets to the world.

Q: What's the key work ahead for the financial market modernization this year?

A: China's financial industry is lagging behind the nation's rapid economic growth. That's why there is a lot left to do to push forward more innovation and reform.

Elevating the scope and stature of financial markets is key for Shanghai to become a leading financial center globally. Shanghai's financial markets system is already in place. We have existing markets for stocks, bonds, commodities, financial futures, gold and foreign exchange.

More efforts must be made to launch many more products in these markets. To expand the scope of our financial markets, we are working to establish an insurance exchange bourse, commence trading in the over-the-counter equity exchange and expand the bank credit transfer market. Trading in trust products is also likely to be launched this year.

Shanghai is always at the forefront of going deeper with innovation. Go first, and test first. That's our motto.

Q: What new products will we see in existing markets?

A: A gold ETF, or exchange-traded-fund, is expected to be launched on the Shanghai Gold Exchange. The product may not be well known in China. However, as high inflation hits consumers, the investment need for gold is rising. The product will be more easily accessible, just like buying shares. Years of research have been done into this launch. All the technical preparation is done. Once regulators give the go-ahead, it can be launched.

Q: Anything else?

A: In the stock market, we hope that the international board will begin this year on the Shanghai Stock Exchange. We want to attract the best companies in the world to go public here. In the commodities market, lead futures are expected to debut.

Q: Companies like HSBC and Unilever have signaled they are keen to list in Shanghai. Market players are speculating that the first company to go public won't be a financial institution. Can you comment on that?

A: The authorities are quite cautious about the international board because they want to avoid any mistakes. It's a market where retail investors can make or lose money. For example, if the international board had been introduced in the first half of 2008, the financial crisis that erupted in the second half of that year would have wiped out much of the value for people holding financial company shares.

For sure, qualified financial institutions are among the foreign companies we want to attract. You mentioned HSBC, which is one of companies we want to see listed here.

However, fund management companies may favor the industrial sector. For instance, companies such as Intel and Boeing are well received in China. There are not so many strong manufacturing companies in the A-share market. Besides, big manufacturing companies are less affected by economic cycles. So these solid global companies are the ones we want to attract. They have big operations in China, and Chinese investors are familiar with their brands and products.

Q: Under your aegis, financial services companies in Shanghai have undertaken overseas recruitment trips to take advantage of the financial crisis and hire professionals to work here. What other means are open to recruit top-flight talent?

A: The Financial Services Office has taken a leading role in encouraging the industry to try to attract the best possible professionals. In the end, it's the financial institutions that hire the people. What we do is create all kinds of channels for that to happen.

Besides overseas hiring trips, we have also organized online video hiring systems. More than 6,000 resumes were received for 130 vacancies advertised by 21 local financial companies. Video-conferencing made it possible for local recruiters to interview professionals working overseas.

Q: Does the Financial Services Office have tailor-made plans to attract expatriate professionals?

A: Not necessarily. We welcome all professionals using the same criteria. However, in order to recruit urgently-needed talents in areas such as private equity and banking analysis, the FSO has set up a special civil service program to attract relevant professionals. They will serve for a period of up to five years and be paid wages according to market.

Q: What advantages does Shanghai have to offer in the global recruitment realm? Income taxes here, for example, are higher than in financial centers like Hong Kong.

A: Shanghai is banking on China's strong economic growth to help it along. It's Shanghai's backbone. Shanghai as a metropolitan area is also strategically located.

For financial services industry professionals, Shanghai offers greater career prospects. This is a place where a professional can chase his dreams in the next decade and climb the ladder faster than he might be able to do in more matured financial centers.

We also offer good education, health care and living conditions for overseas professionals and their families.

Q: China is accelerating measures to make the yuan more accessible overseas. What's the significance of a more global yuan for Shanghai?

A: The State Council wants to build Shanghai into a global financial center on par with the yuan's global position by 2020. It's a strategy. It's unlikely that a city can become a truly global financial center if its currency isn't convertible. The globalization of the yuan and the transformation of Shanghai into a leading financial center are closely related and support each other.

Q: Is that why some economists are predicting that the yuan will be fully convertible by 2020, and some of the more optimistic of them are saying the currency could be freely traded in even five years.

A: If authorities really decide to make the yuan fully convertible in five years, it can be done. It's not a mission impossible.

However, that doesn't necessarily mean we are stalled until that happens.

For instance, the volume of cross-border trade settlements in yuan is growing much faster than what we had expected. China is now in a great position and its efforts are being well received in the world.

Q: What does it becoming a global financial center mean for the man-on-the-street in Shanghai?

A: Creation of jobs and better financial services deliver direct benefits for the city's residents. Shanghai's economic growth, driven by a strong financial industry, will improve the living standards of everyone. A city with more fiscal income will have more money to support its infrastructure.