China Economic Weekly WeChat: ChinaEconomicWeekly
China Economic Weekly official website: Economic Network www.ceweekly.cn
Ge Feng, special commentator of China Economic Weekly
(This article was published in China Economic Weekly, No. 13, 2018)
After 17 years of meticulous preparation, the "Chinese version" of crude oil futures was officially listed on the Shanghai International Energy Exchange Center recently.
The listing and trading of crude oil futures is a landmark event of the reform and opening up of China's derivatives market and even the entire financial market. This financial innovation is expected to drive a number of positive effects worth looking forward to in one fell swoop, including:
First of all, the listing of crude oil futures can provide an effective hedging tool for entity enterprises to avoid the risk of price fluctuations. This kind of financial development for the real economy of real service and support, not only reflected in a single trading variety of crude oil, but can be greatly extended to a full set of industrial chains and consumption systems with crude oil as the core, such as downstream plastics, methanol, PVC and other chemical industries, etc., can thus obtain a relatively stable and reasonable pricing benchmark, so as to better play the basic role of price in resource allocation.
Secondly, the listing of crude oil futures can further promote the internationalization of the RENMINBI. Because as China's first futures variety opened to the outside world, crude oil futures finally chose to be denominated in RMB, and this trading variety is for global traders and brokerage institutions, and the role it is expected to play in the future is to benchmark the global benchmark crude oil contracts such as the West Texas Intermediate (WTI) crude oil futures of the New York Mercantile Exchange and the Brent crude oil futures of the London Intercontinental Exchange. Therefore, its foreseeable massive transaction and settlement scale will greatly expand the use and influence of the RENMINBI in the global market and accelerate its internationalization process.
Third, the listing of crude oil futures can effectively promote the construction of Shanghai international financial center. Because crude oil futures is a financial product involving a wide range of factors, in addition to the directly related settlement, financing, exchange and other supporting service needs, it will also put forward higher requirements for a package of professional service systems including accounting and auditing, legal services, asset evaluation, credit rating, investment consulting, financial information, service outsourcing, etc., and this kind of backward effect on the market system and business environment as a whole is undoubtedly in line with the most essential internal requirements of the national strategy of building Shanghai International Financial Center.
Fourth, the listing of crude oil futures is a fact of iron, responding to the noisy noise of protectionism and demonstrating to the world China's determination and confidence in continuing to open up. The listing of crude oil futures is actually a microcosm of China's process of constantly overcoming unfavorable factors, learning and adapting to international rules, advancing in an orderly manner, and striving to create a win-win situation of cooperation and openness.
The listing of crude oil futures is not easy to come by. In order to finally complete this step, China revised the Interim Regulations on the Administration of Futures Trading twice in 2007 and 2012 respectively; in recent years, from allowing foreign capital to participate in the domestic futures market, to solving the problem of taxation in the delivery process, to solving the problem of how to open accounts for overseas traders, how to enter and exit funds, how to exchange foreign exchange, etc., the Finance and Taxation Department, the General Administration of Customs, the Foreign Exchange Administration and other ministries and commissions have successively revised the relevant rules and formulated a more perfect system. The fruits of this arduous process are not only conducive to the global crude oil price system to reflect market fundamental information more accurately and reasonably, but also provide global investors with more opportunities to participate in the Chinese market and more abundant investment options. Therefore, this is a clear signal that China has once again conveyed to the world through practical measures that the steps of opening up to the outside world will not be slowed down and that China's opening up will definitely bring more surprises to the world.