In the past 10 years, Chinese futures market and other derivative markets have always been associated with risks and speculation. However, in the “capital big bang” of the coming “beautiful new 10 years”, this market is earning an increasingly important status it deserves.

“With the sliding of global economy, China is undertaking strategic adjustments for its economic structure, following which all kinds of macro risks and uncertainties are increasing. As a result, as the best tools to control risks, futures and other derivatives need urgent attentions.” said Hu Yuyue, director of Securities and Futures Research Institute of Beijing Industrial and Commercial University, “It is necessary to set a complete system covering futures, options and other products in both in-the-field and over-the-counter markets, and in both domestic and overseas markets.”

Therefore, it requires the development and improvement of trading category, trading volume, investor structure, futures companies and related laws and regulations.

National debt futures is coming near

In the past 10 years, the number of futures categories has risen from eight in 2002 to 29 in 2012. In 2010, the innovative stock index futures was introduced to the market.

Currently, glass futures have been approved by the State Council. National debt futures, in the list of this year’s key innovative futures products, is coming near.

“It will be sure to come out next year.” said Hu.

Additionally, despite the number of industry practitioners having increased, it is still small compared to that of mature market. “It will be reasonable to form a investor structure dominated by institutional investors in the next 10 years.” said Hu.

To have the pricing power

Currently China doesn’t have strong pricing power in international futures market. This is closely related to the power of the economy. For example, the loss in the non-ferrous metal market results from China’s limited pricing power in international trade due to lack of resources.

It is expected that China will have strong pricing power in the “beautiful new 10 years” and become one of international pricing centers.

Taking crude oil futures, which is under approval, for example, as the globe is round, futures cannot be trade 24 hours in one region. Therefore it is likely that after New York, Brent and Dubai, Shanghai will become next international futures trading and pricing center.

Furthermore, China has most strict regulations and supervision over futures market and other derivative markets. This may on the other hand lead to a bind-up of the development of the markets. The Futures Law is expected to come out within 5 years with innovations, according to Hu.