Zhengzhou Int’l Futures Forum assesses China’s opening-up progress

(Yicai Global) Sept. 9 — The importance of China’s opening-up process was discussed at the Zhengzhou 2022 China Future International Forum, which was held online from Sept. 6 to yesterday.

China has steadily promoted the high-level institutional opening up of the futures market in recent years, enhancing its ability to serve the real economy, said Wang Xiaoming, deputy general manager of the Zhengzhou Commodity Exchange, during the sub -opening forum on September 7, adding that nine commodities, including pure terephthalic acid, crude oil and palm oil, were opened to foreign investors.

The international influence of these commodities has increased, and the “Chinese price” in the futures market has attracted more global attention, Wang said, noting that more openness is needed for China to improve. its fundamental competitiveness in the futures market.

more influential

China is one of the world’s leading producers and consumers of raw materials. It was also the largest commodity futures market in the world for many years. China’s commodity futures trading volume totaled 2.978 billion lots in the first half of the year, accounting for 69 percent of the global total.

By June, the nine international futures and options products in China had become important price benchmarks in cross-border trading. Internationalized products can now be purchased overseas, which is conducive to promoting trade integration between countries and regions.

In addition, China’s stock exchanges encourage the market participation of qualified foreign institutional investors and RMB qualified foreign institutional investors in commodity futures, commodity options and stock index options in accordance with the overall plan of the China Securities Regulatory Commission.

Exchanges continue to improve their opening support services in terms of technology, Wang Ying, vice director of the China Futures Association, said at the forum. Futures exchanges are also accelerating the pace of recruiting traders.

“With the growth of the futures market and the derivatives market in China, foreign players are more interested in participating,” Wang added.

As of last month, a total of 23 futures companies had established 26 first-tier subsidiaries and 30 second-tier subsidiaries in overseas regions.

As the only futures exchange in central and western regions of China, the Zhengzhou Commodity Exchange has placed particular emphasis on opening, Wang Xiaoming said, adding that the exchange listed the PTA as a futures product to attract foreign traders in 2018.

As of June, the exchange had overseas traders from more than 20 countries and regions, including the UK, South Korea, Singapore and New Zealand, and overseas traders held approximately 120,000 lots of PTA futures positions on an average daily basis, with a cumulative trading volume of 33.79 million lots.

The Zhengzhou Commodity Exchange will offer more products to global investors in the near future, he predicted.

More cooperative, more international

The Baltic Exchange, a subsidiary of the Singapore Stock Exchange, has signed a memorandum of understanding with the Zhengzhou Commodity Exchange to jointly explore the research and development of maritime derivatives, said Pol de Win, executive vice president of the Singapore Stock Exchange.

In addition, the Singapore Stock Exchange has established an exchange-traded fund cooperation with the Shenzhen Stock Exchange and partnered with a wholly-owned subsidiary of the Shanghai Stock Exchange with the aim of strengthening the connection between the capital markets of two countries.

Global market participants have struggled with continued uncertainties and volatilities over the past few years and the environmental, social and governance sector will be more prominent in the derivatives market going forward, said Bill Herder, President Asia-Pacific from the Futures Industry Association, at the forum.

The derivatives markets on exchanges are the best place for these products to be traded efficiently and transparently, he said.

China’s Futures and Derivatives Law came into force on Aug. 1 and will have a positive effect on the derivatives industry, Herder noted. The introduction of the law has largely allayed compliance concerns of foreign investors participating in trading in the Chinese futures market, according to Wang Ying.

Editors: Shi Yi, Tom Litting