China Regulator: More Futures and Derivatives Planned
“The regulator will push the reform of the futures market at a faster pace in order to make it better serve the country’s economic growth,” Guo Shuqing, chairman of CSRC, said at a meeting in Beijing.
The regulatory commission plans to improve the trading environment of crude oil futures and start trading of futures for treasury bonds, silver, and coking coal. More agricultural futures, including hog and egg futures, are being studied, according to the CSRC.
Developing futures markets and launching more financial derivatives will help the industrial and agricultural sectors to be more sensitive to market-orientated price changes and raise risk control capacity, said Liu Xingqiang, president and chief executive officer of the Dalian Commodity Exchange.
A surge in oil prices may drive up the cost of industrial output in the coming months and fuel inflation, according to analysts. They predict global commodity prices may stay at a higher level in the short term.
“A more mature environment will enhance China’s pricing power in the global commodity market and reduce imported inflation pressure,” Liu said.
There are currently 27 different kinds of futures being traded in China; the country has been one of the world’s largest futures markets in terms of volume, the CSRC said.
“As China’s futures market is not mature enough, we have to learn from the developed countries,” Guo said.
The regulator also pledged to develop a risk warning system and improve regulatory policies to ensure a stable and safe market environment.