Financial futures are poised to return to China's market after being banned for almost 12 years.

According to a new set of regulations governing futures trading, announced on Saturday, financial futures, which include interest rates, foreign exchange rates and stock indices, can now be traded.

Professionals in the financial industry cheered. Some economists are worried. But most people simply ignored the news because there are not many links between their lives and these highly technical finances.

However, for China's millions of stock investors, this could be a far-reaching development. Stock market index futures, which will offer money-making opportunities for those betting on different market movements, will help iron out fluctuations in the stock market.

Financial futures are also important for those planning China's financial reforms because it will be very difficult to push for further liberalization of interest rates and the foreign exchange rate in a shallow financial market. Currently, neither the interest rate nor the foreign exchange rate is completely determined by the market. But China has to achieve this market link if it wants to allocate its financial resources more efficiently. Opponents of reopening the financial futures market believe the financial market's institutional infrastructure is still not strong enough to support the complicated and, possibly, speculative business.

Indeed, the treasury bond futures market's debacle in 1995 remains a vivid reminder of the shocks and losses a loosely-regulated market can cause. The market drama, brought about by a brokerage attempt to manipulate the market, directly led to the closure of the two-year-old market.

However, opponents must admit that regulators have been drawing on the experience gained through operation of the markets in stocks, futures, and foreign exchange, both positive and negative.

It is certain that regulators will take a cautious, incremental approach in developing the market.

The needs of a maturing financial industry, and, indeed, of the entire economy justify a new start with the financial futures market.

Opposing the market's reopening will not necessarily mean more financial security. The scarcity of advanced financial tools in an increasingly sophisticated economy will actually add to financial risks in the form of huge swings in the stock market and low quality banking assets.

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