Shanghai's Pudong New Area plans to offer tax incentives to overseas bankers, brokers and insurers to help it become a global financial center and head off challenges from Tianjin Municipality and Shenzhen, a city in Guangdong Province.

Pudong will offer rental subsidies, tax rebates, free annual health checks and ease the process for foreigners to become Shanghai residents.

The incentives, which are expected to last until the end of 2010, are being discussed with China's tax authority.

"To create a financial hub like the City of London or Wall Street, we need financial experts and overseas talent," the district's deputy chief, Yan Xu, said in an interview with Bloomberg News in Beijing. "We need financial industry workers with technical expertise that can come up with creative ideas, innovative products."

Pudong, already the China base for companies, including Citigroup Inc and HSBC Holdings Plc, is facing competition from Shenzhen in south China and Tianjin in the north to attract insurance companies, banks and brokerages. The government in March approved Tianjin's bid for special status as a financial zone, and the city is vying to become the base for trading of offshore yuan forwards.

An estimated 10,000 people work at Pudong's 520 local and overseas financial companies, accounting for about a quarter of Shanghai's economy and making the district China's mainland financial center.

Employees of overseas financial companies will get a 200,000-yuan (US$29,000) one-time rental subsidy and a 20-percent tax rebate, while their chief representatives will get tax subsidies of as much as 40 percent, according to the plan.

"This is very welcoming news," PricewaterhouseCoopers' Shanghai partner Stacy Kwok said.

Pudong is home to 73 banks, 202 brokerages, 145 insurers and the larger of the mainland's two equity bourses.