Officials, experts hail Shanghai FTZ's positive influence on financial trading

The favorable policies in the China (Shanghai) Pilot Free Trade Zone have contributed to the infrastructure construction and product introduction of major financial trading venues in Shanghai, thus facilitating China's high-quality economic development, local officials and industry experts said on Wednesday.

Data provided by the Shanghai Futures Exchange (SHFE) shows that 23 futures products and another nine options are currently being traded at the exchange. The total trading volume of the futures and options reached 1.35 billion lots by the end of August.

Of the 32 products rolled out at the SHFE, six of them are directly available to international investors. Among the six are the yuan-denominated crude oil futures - China's first internationally traded futures product - as well as the Containerized Freight Index (Europe Service) futures contract, China's first shipping futures product.

Jiang Xiaoquan, director's assistant to SHFE's settlement department, said in a media briefing on Wednesday that futures delivery serves as an important bridge linking the spot market and the futures market. The SHFE has set up 12 delivery warehouses in the Shanghai FTZ covering the exchange's 10 futures products such as copper, aluminum, nickel, low sulfur fuel oil and natural rubber.

The smooth delivery of these futures products in the Shanghai FTZ has helped companies to better manage risks, stabilize futures contract prices, and elevate the global influence of the internationally traded futures products, he said.

Likewise, the international board launched at the Shanghai Gold Exchange (SGE) in September 2014 has helped to increase China's international influence in the pricing of gold, said the exchange's vice-general manager Xu Huizhu, in a media briefing on Wednesday.

In 2014, SGE set up an offshore delivery warehouse in the Shanghai FTZ, which has helped Shanghai to become a hub for the delivery, storage and intermediary trade of gold in Asia. Its influence in the global market has also been increasing following efforts to conduct price authorization cooperation between the Chicago-headquartered world's leading derivatives marketplace CME Group and Dubai Multi Commodities Centre, said Xu.

Meanwhile, the use of the Free Trade Account system since 2014 for gold trading and settlement has helped expand the application scenarios of offshore renminbi, advancing the internationalization of the Chinese currency, she added.

The trading value of the SGE's international board was 1.79 trillion yuan ($240 billion) in the first eight months of this year. The yuan-denominated gold introduced by the exchange in 2016 saw its annual trading volume increase 1.5 times in seven years to 1,454 tons in 2022.

The Shanghai Data Exchange (SDE), which started official operations in early January, saw its trading value exceed 100 million yuan in August. Nearly 1,500 data products related to sectors like finance, shipping and transportation are now trading at the SDE, said the exchange's vice-general manager Wei Zhilin.

Wei noted that the Pudong government had in July released a guideline to provide capital support to the Shanghai FTZ to facilitate the initial listing of data products and the circulation of data products. The entire data trading ecosystem will be completed following the Shanghai FTZ's latest moves, he added.

The Shanghai FTZ, the first of its kind in China, will celebrate its 10-year anniversary on Friday.

Dai Xiangjia contributed to the story.