The futures market in China has not been marginalized again
despite a dwindling volume of transactions and an overall loss in
the business.
The remarks were made by Yang Maijun, director of the futures
section of China Securities Regulatory Commission (CSRC),
at an international forum on futures investment held in Shanghai on
Saturday.
"The market operation has on the whole been normal," said Yang,
who emphasized that the country's futures market had been
developing along a healthy track through repeated rounds of
reshuffles in the past years.
The volume of transactions on the futures market has kept
sliding since the beginning of the year, and the futures brokerage
business as a whole has been suffering losses for two consecutive
quarters as there have been no breakthroughs in some major policies
awaited by the futures market.
Some futures brokers thus lack confidence in the futures market
development and start to worry that the futures market might become
marginalized again.
Commodities being traded at the futures market are bulk items
that have a great bearing on the national economy, so it is normal
to have a certain decline in the volume of transactions on the
futures market following the macro economic control, said Yang.
Statistics as of Friday show the volume of futures transaction
since the beginning of the year is nearly 9 trillion yuan (about
US$1.11 trillion). Based on this fact, the futures transaction this
year is expected to be close or equal to that of last year,
according to Yang.
"China has laid out a detailed target for market economic
restructuring and development, and the futures market, an
inseparable part of the country's market economy, will be sure to
expand in a sustainable way," said the CSRC official.
Yang believed that the expansion of the country's economic and
financial reforms concerning such aspects as the split share
structure, interest and exchange rates, and the country's spiraling
demand for bulk raw materials were favorable factors for the growth
of the futures market.
In the meantime, the State Council, the Chinese cabinet, has
promised to keep increasing futures trading of bulk commodities in
its opinions of guidance issued for the reform.
Disclosing that the CSRC has been studying policies capable of
promoting a standardized development of the futures market and the
establishment of a stable retreat system in the futures market,
Yang urged the futures industry to get ahead by seizing favorable
opportunities, value reform and development of the sector itself,
step up internal adjustment and keep improving risk control.
(Xinhua News Agency September 11, 2005)