UC Irvine

This study explores both the extraordinary growth processes that position a city as a leading international finance hub, and the conditions that destabilize this momentum, comparing the top two international gateway cities to the China market: Hong Kong and Shanghai during 2001–2024. We measure the presence and external connectivity of Multinational Corporations (MNCs) in both cities in tandem with their internal industrial composition across sectors. We find that sharper services sector transitions translate to greater connectivity to the world economy via MNCs and structural advantages as a headquarters location, Hong Kong leading on both scores over Shanghai. We also find that Hong Kong’s historical growth has been measurably disrupted by mainland China’s authoritarian encroachment, or erosion of democratic, legal and economic freedoms. Taken together, growth processes within world-city formation favor strong services sector transitions that enable linkage to and local agglomeration of global services-oriented MNCs, but political underpinnings also serve as important enabling factors that can determine whether an otherwise strong global-city experiences growth or destabilization over time.