(Yicai Global) May 28 -- China, the world's biggest commodities trader, plans to give foreign investors greater access to the country's futures market, according to a government official.
China will introduce Japonica rice, urea and other futures to make more contracts available to overseas traders as part of efforts to raise the country's influence in the international market, Lu Dongsheng, the director general of the China Securities Regulatory Commission's Futures Department, told a financial forum today. He did not give a timetable.
The country's futures market has developed to the point where 12 of the top 20 farm product contracts trade on Chinese bourses. It has been adding new options in recent years and gradually opening up the market to foreign investors the better to command global commodity pricing.
Crude oil, one of the world's most actively traded commodities, became the first yuan-denominated futures that overseas traders could buy and sell without a presence in the country in March 2018. The CSRC intends to review the experience of opening up the three futures markets of crude oil, iron ore and terephthalic acid, or PTA, to international investors, Lu said.
The watchdog will also speed up the launch of options for existing commodities to gradually form a multi-level and comprehensive futures and derivatives market system providing more risk control tools for the real economy, Lu said at the Shanghai Derivatives Market Forum.
Urea, also called carbamide, is used in fertilizer and as a feed supplement and forms a base for some plastics and drugs. Japonica rice has short, round grains and is stickier than other varieties, with some strains used to make China's beloved glutinous rice dishes.
Editor: Ben Armour