From SafeHaven, May 30:
For foreign investors, playing in the lucrative Chinese financial markets has been anything but easy or straightforward. Fortunately, this has been rapidly changing over the past few years with China’s equity, commodity and capital markets increasingly moving into the global investment mainstream.
And now, with trade tensions between the U.S. and China reaching fever pitch, Beijing is desperate to prove to the world that it’s not the economic or trade pariah that it is frequently made out to be by opening up its markets even further.
After the launch of its “internationalised” iron ore contract last year - the first of its kind for international investors - China now plans to expand the scope of its international commodities trading by adding a host of non-ferrous metals in a bid to hold more sway over global pricing of major commodity imports.
The Middle Kingdom plans to add international futures contracts for aluminum, copper, nickel, lead, zinc and tin to the Shanghai Futures Exchange (ShFE) in about two years’ time - quite a dramatic improvement to the current tally of only three contracts that are available to foreign investors.
Currently, overseas investors can only access iron ore contracts on the Dalian Commodity Exchange; crude oil futures on the Shanghai International Energy Exchange and plastics raw material purified terephthalic acid (PTA) futures contracts on the Zhengzhou Commodity Exchange.
The international crude oil futures on ShFE were able to hit an impressive turnover of 17.1 trillion yuan (US$2.48 trillion) in the 12 months since their March 2018 launch, proving the market is ready for prime time.
New level of openness
In a press conference presentation, chairman of the Shanghai Futures Exchange, Jiang Yan, revealed that the bourse plans to attain a ‘‘new level of openness’’ as regulators give increased access to yuan-denominated contracts to overseas investors. Jiang said ShFE plans to initially use the TSR 20 technically-specified standard rubber contract to lure in more international investors.
Despite the latest flare up in trade tensions with Washington, we have been witnessing a definite seismic shift in China’s economic multilateral relations with the outside world....MORE
