China's 6 financial markets taking shape
By Dai Yan (chinadaily.com.cn)Updated: 2007-06-25 14:09 With 20 years of development, the bond, interbank, stock, foreign exchange, futures and gold markets have become six major markets of the Chinese financial industry, and a blueprint for their future development has been mapped out, according to a recent seminar.
The Chinese currency markets including interbank, repurchase and bill markets, the capital market composed of bond and stock markets, as well as the foreign exchange, gold, futures and insurance markets are all in shape.
The Chinese bond market will be based on the domestic bond market and become an international renminbi bond market. Now it has formed a structure with the interbank market as its main body and the exchange market as a complement. The bond balance in China reached 8.78 trillion yuan (US$1.12 trillion) at the end of 2006, accounting for 2.2 percent of the global bond market and standing eighth worldwide.
Transactions in the interbank market totaled 2.27 trillion yuan during the first five months of 2007, almost even compared with last year's total. The Interbank Offered Rates, especially Shanghai Interbank Offered Rate, have succeeded in reflecting short-term market liquidity changes, macro economic policy, capital market and public expectations.
The central bank will expand participant scope in the interbank market and invite more types of eligible financial institutions in the competition, said Zhou Rongfang, deputy director of Financial Market Management Department under Shanghai branch of the central bank.
Shanghai Stock Exchange took the ninth place worldwide by market value in April, said Liu Xiaodong, deputy general manager of the Shanghai Stock Exchange. According to statistics, the combined market value of the Shanghai and Shenzhen stock exchanges was US$1.15 trillion at the end of 2006, accounting for 2.26 percent of the world's total.
The Chinese foreign exchange market is increasing foreign exchange varieties, and will continue improving transaction rules, said Wang Yungui, deputy director of Balance of Payments Department under the State Administration of Foreign Exchange. The foreign exchange market has also introduced over-the-counter transactions and market maker rules.
Shanghai has become one of the important copper futures pricing centers in the world, with its copper futures transactions ranking third. Shanghai also leads the world in rubber futures transactions and takes second place in soybean futures transactions.
Financial futures and commodity futures markets are expected to achieve common development, said Zhu Juehai, assistant general manger of Shanhai Futures Exchange.
Gold trading volume at the Shanghai Gold Exchange, China's largest precious metals bourse, accumulated 3,909.48 tons by the end of May 2007, worth 518.7 billion yuan. Platinum and white gold dealings totaled 131.63 and 146.21 tons respectively, worth 33.87 billion yuan and 526 million yuan. The gold market will introduce gold futures and options, and develop individual gold trading business, according to Shen Xiangrong, chairman of the exchange.
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