China is likely to set up a new stock market through which smaller companies can access domestic and possibly international capital, the Financial Times reports.

In recent years, the paper observes:

 “many [smaller] Asian companies have opted to list in Europe or the US because of a perception that there was greater liquidity in those markets. However, many of the listed companies … experienced poor analyst coverage and low trading volumes …. The trend has now reversed amid a growing belief among Asian executives that they no longer need to list so far away from home to access capital.”

New York and London have both thrived as global financial centers partly because companies seeking funds through stock and bond issues thought that a listing and/or other relationships in either or both of the cities was integral to raising money on good terms.

As more emerging nations develop their own markets, New York and London both will have to fight harder to win this argument.