Focus on futures market to serve the real economy

At a recent futures forum in Zhengzhou, capital of Henan province, the country's top securities regulator said that active efforts will be made to introduce novel futures products, deepen products and services innovation, and give full play to the role of futures to better serve the real economy.

China has continuously introduced product futures covering the main industries of the national economy that can meet enterprises' hedging needs, ensure stable prices and supplies, and enhance the resilience of the country's industry chains.

In the past 10 years, the new listed varieties in China's futures market have exceeded the total number of varieties in the preceding 20 years. Particularly, the development of pure terephthalic acid, methanol and other intermediate products futures has enhanced the international appeal of the domestic market. China's futures market has set up a delivery system that can avoid extreme price fluctuations. In recent years, such extreme events as negative oil prices and sharp nickel price rises at the London Metal Exchange or other international futures markets, which have caused serious damage to the real economy and financial market, usually occur not long before the contract expires, and the existing margin system in the international futures market provides opportunities for predatory trading. In China, the margin will be raised as the contract expiration date approaches, increasing speculation costs and ensuring the smooth operation of domestic futures prices.

In addition, ever-strengthened regulations have helped China's futures market avoid excessive speculation. By adjusting margin, commission and rise or fall limits, China has actively regulated futures prices and reduced price fluctuations. However, China's futures market still faces problems such as limited variety and scale, unreasonable participant structure and insufficient global pricing power.

China should promote the further openness of its futures market, strengthen its external appeal, and improve its narratives in global commodity pricing. The reform of the QFII and RQFII systems should be further advanced to rationally introduce overseas capital, and ensure the smooth flow of domestic and foreign factors and resources. Efforts should be made to promote the innovation of product and business models, and based on development strategies such as green finance and "double carbon" goals, and the risk management experience of traditional varieties, innovative varieties such as carbon emissions and commodity index should be introduced.

The country should exercise effective but moderate margin regulations to avoid excessive fluctuations while curbing market speculations.

ECONOMIC DAILY