Shanghai Futures Exchange serves real economy, expands global influence

BEIJING, Dec. 2 (Xinhua) -- As a central hub of China's futures market, the Shanghai Futures Exchange has always focused on serving the real economy and facilitating the country's high-quality development.

Established in 1999, the exchange is the main venue for industrial derivatives trading in China. Currently, there are 22 futures contracts and nine commodity options available for trading on the exchange.

Ranked among the world's leading exchanges, the Shanghai exchange witnessed a trading value of 141.3 trillion yuan (about 19.87 trillion U.S. dollars) last year.

SERVING THE REAL ECONOMY

With the ultimate goal of serving the real economy, the exchange has launched a string of products to help domestic companies hedge against volatility amid global economic uncertainties.

In July this year, the exchange launched synthetic rubber futures, the world's first futures contract that takes butadiene rubber as the underlying product for delivery.

"The launch of the synthetic rubber futures helps strengthen the resilience and security of China's petrochemical industrial and supply chains," said Lu Feng, deputy general manager of the exchange.

To better serve the goal of building China into a maritime power, the exchange launched the containerized freight index futures in August 2023, which helps sea freight firms better cope with swings in transportation rates as well as supply and demand imbalances.

"As one of China's key pieces of financial infrastructure, the exchange has been contributing to the high-quality development of the futures market and promoting the country's energy transition," Lu added.

SHANGHAI PRICES

With the growing influence of the exchange, overseas companies are increasingly paying close attention to the "Shanghai prices."

"As more overseas investors are participating in the trading of futures on the exchange, the 'Shanghai prices' provide a more accurate price reference for global investors, and also lead the price formation of more global commodities," said Wu Hongsong, general manager of Haitong Futures Co., Ltd.

Take the Shanghai crude oil futures for instance. Listed in March 2018, the crude oil futures contract is the first commodity futures contract on the Chinese mainland that is open to overseas investors.

Over five years of development, the Shanghai crude oil futures market has become the third-largest oil futures market behind West Texas Intermediate and Brent in terms of trading volume.

"In the sectors of non-ferrous metals, energy and chemicals, the 'Shanghai prices' have become important global benchmark prices and have been internationally recognized," said Wu.

AIMING HIGH

The Shanghai exchange aims to further cement its pricing status for bulk commodities and enlarge the international influence of "the Shanghai prices."

According to its latest strategic plan, by 2025, the exchange will further promote the functioning of futures products and expand its role in serving the real economy. Specifically, the "Shanghai prices" will become more recognized in the international market.

The exchange will also strive to grow into a service-oriented, international, digital, green and modern futures exchange, the plan said.

By 2035, the exchange will become a world-class exchange that echoes the quality socialist market economy, features abundant products, improved functions, advanced technologies and efficient governance, and has pricing recognition in major commodities.

"The exchange will strengthen collaborations with relevant institutions, launch more innovative products and improve its rules and standards to build itself into a trading platform shared by the world," said Tian Xiangyang, chairman of the exchange.