Commodity trading in China


Commodity trading in China

Commodity trading in China has a short but high-growth history. With an increasing product variety and deepening liquidity pools, the mainland's futures market is playing an increasingly important role in serving the national economy.

At present, the commodities markets in China are still in a development stage, with only a few exchanges in China trading in a small group of commodities. In the next few years, the Chinese government will gradually allow more commodities products to be traded in China along with various related derivatives.

Contents

Size

The combined turnover of the nation's three commodity futures exchanges totaled 40.97 trillion yuan in 2007, up 95% from the year before. The aggregate trading volume of these exchanges amounted to 728.46 million hands in 2007, up 62% over the previous year. More than half of the transactions took place on the Dalian bourse, while turnover on the Shanghai bourse amounted to 23 trillion yuan, accounting for half of the total.

The boom of large trading market across the country has contributed to the increased flow of vegetables and fruit from south to north and west to east and promoted the country's commercialization of agricultural products.

Development

The demand for commodity futures as hedging tools has been on the rise as the Chinese economy continues to advance at a brisk pace. The country is now one of the largest producers and consumers of a wide range of commodities, including oil, steel, copper, corn, wheat and soybean. To diversify their product ranges, the nation's three commodity futures exchanges are doing research to introduce new contracts.

For example, the Shanghai bourse plans to launch new contracts on nickel, silver and steel futures in the coming years. The Zhengzhou bourse is preparing to launch early long-grain non-glutinous rice futures, while the Dalian bourse is preparing to introduce hog futures to protect hog breeders from being exposed to sharp price swings.

As a major producer and consumer of commodities, China has large potential for developing its futures market. China's commodity futures markets have expanded product ranges and deepened liquidity pools to cater to the increasingly diverse needs of the nation's rapidly growing economy.

With increasing volatility in global commodity markets and prices, companies have been expanding their agricultural product, precious/base metal, fuel oil and other commodity-related investments in China.

Exchanges

There are three commodity exchanges in China after the merger of 50 exchanges into 14 in 1995 and subsequently into three in 1999.

The China Financial Futures Exchange (CFFEX[1]), the country's first financial futures exchange, was inaugurated in October 2006. The long-awaited CSI300, the first mainland stock index futures, will be traded on this bourse, which is working to the launch.

See also

References

Further reading

  • China's Financial Markets: An Insider's Guide to How the Markets Work By Salih N. Neftci, Michelle Yuan Menager-Xu (Elsevier, 2006) ISBN 0120885808

External links


Wikimedia Foundation. 2010.

Look at other dictionaries:

  • China Cotton Association — (CCA) is a China non profit federation in the area of cotton, which is voluntarily established by cotton farmers, cotton farmers cooperative organizations, enterprises engaged in cotton production, purchase, processing and operation, cotton… …   Wikipedia

  • China Stock Index Futures — China Shanghai Shenzhen 300 Stock Index Futures[1][2], often abbreviated to Hushen 300 Index (Shanghai is commonly abbreviated in Chinese as Hù,and Shenzhen is abbreviated as shēn), designated by the commodity ticker symbol IF, is a stock market… …   Wikipedia

  • China Beijing Environmental Exchange — (CBEEX) is a corporate domestic and international environmental equity public trading platform initiated by the China Beijing Equity Exchange (CBEX) and authorized by the Beijing municipal government. In June 2009, the CBEEX signed a deal with… …   Wikipedia

  • china — /chuy neuh/, n. 1. a translucent ceramic material, biscuit fired at a high temperature, its glaze fired at a low temperature. 2. any porcelain ware. 3. plates, cups, saucers, etc., collectively. 4. figurines made of porcelain or ceramic material …   Universalium

  • China — /chuy neuh/, n. 1. People s Republic of, a country in E Asia. 1,221,591,778; 3,691,502 sq. mi. (9,560,990 sq. km). Cap.: Beijing. 2. Republic of. Also called Nationalist China. a republic consisting mainly of the island of Taiwan off the SE coast …   Universalium

  • China Financial Futures Exchange — The China Financial Futures Exchange (CFFEX), is a futures exchange established in Shanghai in September 08, 2006 with the approval of the State Council and the authorization of China Securities Regulatory Commission (CSRC). It is a joint venture …   Wikipedia

  • China Beijing International Mining Exchange — (CBMX; Chinese: 北京国际产业权交易所; pinyin: Běijīng guójì kuàngyè quán jiāoyì suǒ​) is an electronic transaction bourse and platform for mineral rights transactions in China. (CBMX p. 4) It handles transactions for both State owned enterprises SOEs… …   Wikipedia

  • China Banking Regulatory Commission — 中国银行业监督管理委员会 Agency overview Jurisdiction National Headquarters Beijing Agency executive Shang Fulin, Chairman Parent agency …   Wikipedia

  • China Resources Shenzhen International Trust — Investment 華潤信託 Type State owned enterprise Industry Investment company Founded 1982 Headquarters Shenzhen, People s Republic of China …   Wikipedia

  • China Labour Bulletin — (CLB) is a non governmental organization that promotes and defends workers’ rights in the People’s Republic of China. It is based in Hong Kong and was founded in 1994 by labour activist Han Dongfang.[1] The CLB advocates stronger protection for… …   Wikipedia


We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.