China plans to offer stock index futures, bond and interest rate futures and currency derivatives through a financial derivatives exchange to be based in Shanghai, sources said.
Analysts suggest that foreign investment needs to be allowed in futures first before launching the new exchange for financial futures and derivatives. Otherwise, there would not be enough liquidity in financial futures; they need to lay the legal groundwork first. However, QFIIs have not been allowed to enter China’s futures market yet.
Currently, direct trade by foreign institutional investors are only allowed in RMB-denominated A-share markets and bond markets in China under the QFII plan. The QFII plan limits overall investment to US$10 billion, of which US$6.57 billion has been allocated.
China had the largest economy in the world for most of the past two thousand years, during which it has seen cycles of prosperity and decline. Since the introduction of economic reforms in 1978, China has become one of the world’s fastest-growing major economies. As of 2014, it is the world’s second-largest economy by nominal total GDP and largest by purchasing power parity (PPP). China is also the world’s largest exporter and second-largest importer of goods.[20] China is a recognized nuclear weapons state and has the world’s largest standing army and second-largest defence budget. The PRC has been a United Nations member since 1971, when it replaced the ROC as a permanent member of the U.N. Security Council. China is also a member of numerous formal and informal multilateral organizations, including the WTO, APEC, BRICS, the Shanghai Cooperation Organization (SCO), the BCIM and the G-20. China is a great power and a major regional power within Asia, and has been characterized as a potential superpower.
Source: China Knowledge
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