The Xinhua-Dow Jones International Financial Centers Development Index Report was based on a survey of 6,607 financial services professionals, regulators and decision-makers around the world. Participants were asked to rate more than 45 global financial hubs.
The top 10 cities in the 2014 results are New York, London, Tokyo, Singapore, Hong Kong and Shanghai (the two cities tied for fifth place), Paris, Frankfurt, Beijing and Chicago.
Shanghai ranked sixth last year. But this year, analysts and market insiders said that because of the city's steady growth and benefits from the opening-up and integration into the world's financial markets after a year of operation of the China (Shanghai) Pilot Free Trade Zone, it has more potential than ever as a financial hub and an Asian financial center.
"Shanghai has been included in the top 10 in the sub-index of national environments for its financial development, which has benefitted from the FTZ's trial financial policies, including the launch of free trade accounts and cash pooling," said Zhou Wenlong, vice-president of the Index Institute of the National Financial Information Center.
Xiao Lin, director of the Shanghai Development Research Center, said that expanding renminbi business has supported the city's position as an important player for the pricing and clearing of Yuan-denominated products.
Cross-border settlement in renminbi within the FTZ totaled 156.3 billion Yuan between January and August, up 250 percent year-on-year based on the same bonded area before the FTZ was launched.
"Shanghai aspires to become an international financial center that matches China's economic power and renminbi's international position by 2020," said Xiao.
The city was also rated as most likely to become a leading international financial center, ahead of Moscow, Sao Paulo, Johannesburg and Mumbai, according to the report.
Wang Lei, a researcher at the Center for BRICS Studies at Fudan University, said that the BRICS countries (Brazil, Russia, India, China and South Africa) may strengthen cooperation in the financial sector and give emerging markets more say in the world's financial development.
The southern economic powerhouse of Shenzhen ranked 15th on the list.
The IFCD Index was launched by CFC Holding Co Ltd, a subsidiary of the official Xinhua News Agency and CME Group Index Services LLC (S&P Dow Jones Indexes).