Oil futures trading soon

China is likely to launch crude oil futures trading this year, the country's first international futures contract, Yang Maijun, the president of the Shanghai Futures Exchange, said on Tuesday.

The contract will be yuan-denominated and the regulator is drafting relevant tax and foreign exchange policies, Yang revealed in Beijing. Trading will be open to foreign investors and brokers to better reflect prices on the spot market, Yang said.

The decision is likely to be viewed as an effort by the world's largest oil importer to gain a greater say in oil pricing, and a cushion for the negative impact of sharp price fluctuations on the international markets.

The announcement is also expected to prompt the country's legislators to accelerate their drafting of China's first futures law, a crucial part in any open futures market, which could boost international investor confidence.

Yang, a deputy of the National People's Congress, the country's top legislature, confirmed the second version of the futures law had already been completed and that conditions for the official legislation to be issued are in place.

"Many international investment banks have expressed interest in entering China's futures market. But they are confused as there is no national legislation in place yet to regulate the market and protect market players' rights," he said.