Productive partner: China's recovery is helping drive the ASX higher.

Sydney and Melbourne have slipped down the global rankings as Asian cities like Shanghai emerge as financial hubs. Photo: Reuters

Sydney and Melbourne have both dropped in the rankings of the world's leading financial centres, falling further behind Asia's business hubs.

In the latest Global Financial Centres Index, Sydney has been overtaken by Chinese cities Shenzhen and Shanghai, sliding from 15th to 23rd in the rankings.

Melbourne has slipped from 33rd to 37th, falling behind Osaka and Abu Dhabi.

This year's rankings saw New York eclipse London as the top ranked city for the first time since the survey began in 2007.

"Sydney is now an established transnational centre having been a global leader, although it is on the borderline and may well regain global leadership status in the near future,'' the report, which was released by London-based think tank Z/Yen, said.

The GFCI ranks the competitiveness of 83 world financial centres. The survey of 3246 financial services professionals takes a number of different measures into account, including skill set of workforce, quality of education, flexibility of the labour market, regulation, tax rates, corruption levels as well as things like the price of real estate and public transport.

Despite the change at the top, the top four cities remain the same: New York, London, Hong Kong and Singapore.

''London suffers when global financial news tarnishes that brand - London-IBOR, the London Whale, the foreign exchange scandal only now starting to bite, with rumours circulating about other index, benchmark, and commodities scandals. In fact, it seems increasingly apparent that authorities were aware of, yet tolerated, the LIBOR scandal well into 2012,'' Z/Yen executive chairman Professor Michael Mainelli said.

In the Asia-Pacific, the region's powerhouse economies are creating an even larger gap between themselves and their weaker counterparts.

Sydney ranks 7th in the Asia-Pacific region, while Melbourne just falls out of the top 10, ranking 11th.

''There is a 'shakeout' in Asia with the leading centres - such as Hong Kong, Singapore, Tokyo, Seoul and Shenzhen - doing significantly better than the weaker centres. For example, Kuala Lumpur, Manila, Jakarta and Mumbai,'' the report said.

Top 10 global financial centres

  1. New York
  2. London
  3. Hong Kong
  4. Singapore
  5. Zurich
  6. Tokyo
  7. Seoul
  8. Boston
  9. Geneva
  10. San Francisco