China to open up access to yuan-denominated commodity futures contracts as trade war escalates
- China’s largest commodity exchange plans to launch rubber and non-ferrous metals contracts that will be open for trade by foreigners
- Futures contracts tied to crude oil on the Shanghai International Energy Exchange saw turnover of 17.1 trillion yuan (US$2.48 trillion) in 12-months since launch in March 2018
Beijing plans to further internationalise its domestic commodity futures market by inviting foreign investors to trade upcoming yuan-denominated contracts of rubber and non-ferrous metals, a move designed to enhance itsglobal pricing power as the US-China trade war escalates.
Jiang Yan, chairman of the Shanghai Futures Exchange, said the bourse would reach a new level of openness as regulators gave overseas investors widened access to yuan-denominated contracts.
“We want to ensure the smooth running of crude oil futures and take advantage of the launch of the TSR 20 [technically specified rubber] … contract to increase foreign participation in China’s futures market,” Jiang said at the Shanghai Derivatives Market Forum on Tuesday. “We also want to conduct more collaboration with foreign counterparts in flexible ways.”
The exchange started trading yuan-denominated crude oil futures on the Shanghai International Energy Exchange in March last year. The futures contract was the first of its kind open for trade by foreigners in China.
The TSR 20 rubber contract will become the second commodity futures contract open to trade by foreigners.
Jiang did not announce a time frame for the launches of the rubber and non-ferrous metals contracts.