The United States may be grappling with its worst economic crisis since the Great Depression, but these are go-go days in China.

Venture capital, private equity and foreign direct investment are at all-time highs. Although Shanghai's stock exchange has lost close to two-thirds of its value this year, China's big banks have escaped the credit catastrophe largely unscathed and the economy continues to expand briskly.

Fan, an investment manager at Guotai Asset Management, which oversees funds valued at around US$5.1 billion (HK$39.78 billion), said that despite the country's inexperience in the financial sector, China has a rare trump card: mountains of cash.

"It is inevitable," he said, "that we will take the US's place as the world leader."

But Shanghai is just one of several cities harboring ambitious - and to some analysts, fanciful - aspirations while the global finance industry is reshuffled.

Tokyo has lifted some regulations on banks and insurance groups and has begun to do something it resisted for a long time: print securities documents in English.

The Singapore government, which through its massive sovereign wealth funds has increased its private equity and other financial holdings in recent years, has said it is looking to invest in more distressed assets in the United States.

And Dubai, riding the Middle East's oil-fired boom, has declared itself the center of Islamic finance and says it aims, in the words of Dubai's government, to "develop the same stature as New York."

With US investment houses tumbling into bankruptcy, consolidating operations or transforming themselves into more closely regulated commercial banks, Wall Street's reputation as the prime address to raise capital, seek investment advice or trade securities is no longer rock-solid.

The flow of capital had already begun moving away from the United States this summer.

A survey released last week about the competitiveness of world financial centers found that New York and London, often neck-and-neck in such rankings, were still at the top.

But the survey also found that the two cities' lead over their rivals shrank after February because of the credit crisis and the collapse of US securities firms. Frankfurt and Paris also lost ground.

Cities in Asia and the Middle East, meanwhile, were deemed most likely to gain in importance.

"Dubai, Singapore, Shanghai and Mumbai - they are the probable leaders," said Michael Mainelli, executive chairman of Z/Yen group, which carried out the survey.

Researchers looked at factors including infrastructure, foreign direct investment, cost of living and the presence of a fair and just business environment.

Arkady Dvorkovich, senior economic adviser to Russian President Dmitry Medvedev, said the US financial crisis could benefit Moscow.

"We are not naive," he said. "We're not trying to say that Russia will substitute for the United States in the financial sense, but in certain niches, there's a certain window of possibility for Russia to be a much more active player. Russia could "serve as a leading financial system for neighboring countries and Eastern Europe in the medium-term, in the next five to seven years," he said.

Firms in some financial centers are using the Wall Street breakdown to snap up assets - and people, tens of thousands of whom have been laid off in the past few months.

Japan's Mitsubishi UFJ bought up to a 20 percent share of Morgan Stanley for US$8.4 billion, while Nomura Holdings said it would buy the Asian, European and Middle Eastern operations of Lehman Brothers.

Dubai's International Financial Center, meanwhile, boasts that its tenants are eligible for benefits such as a zero tax rate on profits, 100 percent foreign ownership and no restrictions on foreign exchange or repatriation of capital.

In addition, said Mohammed Abu Ali, an assistant professor of economics at Dubai's American University.

"Dubai has an ideal location. It is located between the East and the West. It is in a good time zone. And it has a very dynamic economy,"

Hussain al-Qemzi, chief executive of the Noor Islamic Bank, which is majority-owned by the Dubai government, aims to turn the city into a hub for Islamic banks, prohibiting usury, that would rival Wall Street's traditional banks.

Shanghai first got the serious attention of global financiers last November when its bourse hit record highs and PetroChina (0857) became, albeit briefly, the world's first US$1 trillion company, surpassing the value of US- based Exxon Mobil.

But many analysts dismissed that rise as irrational exuberance because of Shanghai's multiple drawbacks as a financial center; its lack of experienced workers, its strict capital controls and concerns about rule of law and courts that still sometimes put political interests over justice.

Yet the recently opened Shanghai World Financial Center, a 101-story marvel of glass and steel, has become a beacon for dealmakers from around the world.

The 138 seats at the center's US$200-a-head French restaurant, quaintly known as the Dining Room, are booked solid for the next three weeks. And although Lehman Brothers scrapped plans to rent offices and Morgan Stanley cut its leased space from eight to four floors, there are plenty of Chinese companies waiting to move in.

"To us the crisis might be beneficial because we can attract more talent from Wall Street to Shanghai," said Shi Haining, deputy director of the city's Pudong New Area financial services office.

"There are also possible outgoing investments, because Wall Street lacks liquidity. And there may be money that might have gone to the US that comes to China instead."

THE WASHINGTON POST