China to strengthen rules governing futures market

China's State Council unveiled on Friday a circular on strengthening regulation of the futures sector and preventing risks in a move to boost its high-quality development, contribute to industrial and supply chain security, and better serve the high-quality development of the Chinese economy.

According to the document, the China Securities Regulatory Commission (CSRC), National Development and Reform Commission and several other government agencies proposed 17 specific measures including strictly supervising futures transactions, strictly cracking down on illegal behaviors, boosting the futures market to better serve the real economy, and steadily boosting its opening-up.

By 2029, China aims to build the overall framework of a future regulation system and business model with Chinese characteristics, characterized by notable growth in regulation capability. The country aims to build a secure, regulated, transparent, open, and vibrant futures market system by 2035, attracting the full participation of global traders in the transaction of major varieties, and striving for notable growth in the price influence of bulk commodities and market competitiveness, according to the document.

"The circular is significant for the healthy development of China's futures market, since it comprehensively covers almost all aspects of this market, for example, the development of new futures contracts, the opening-up of the futures market and risk prevention," Xi Junyang, a professor at the Shanghai University of Finance and Economics, told the Global Times on Friday.

Currently, China is entering a new era of high-quality development, especially with the country making efforts to develop new quality productive forces, for which the futures market can play a large role thanks to its function of transmitting future information, Xi said.

As China aims to build itself into a financial powerhouse as part of its efforts to pursue high-quality development of the financial sector, efforts are needed to greatly develop the futures market, including enriching the futures product system and enhancing its capability to serve the real economy, he said.

China's futures market originated from the Zhengzhou Grain Wholesale Market in 1990. It is an important part of the country's financial system, with functions including price discovery, risk management, and allocation of resources.

After more than 30 years of development, China's futures market has made remarkable progress in serving the real economy. To date, a total of 141 investment varieties have been listed on China's futures market, covering the major fields of the country's economic development, such as agriculture, industry, shipping, and finance, according to the CSRC.