Yang Maijun-- Chairman of the Board, Shanghai Futures Exchange

Summary:

Financial market and petroleum market have enjoyed rapid growth in recent years. Economic globalization, asset securitization, trade networking and commodity financialization have become an irreversible trend of the era. With increasing involvement of financial institutions in petroleum market and development of derivatives, futures price has gradually assumed the benchmark price of petroleum trade, and the international petroleum market has more financial attributes integrated to it.

I. Status quo of China's commodity futures market

China's commodity futures enjoy fast growth in recent years. In 2012, China's commodity futures market cleared 1.345 billion commodity futures contracts in total, up by 34.05% compared with that in the previous year, accounting for about 42.11% of the total volume of global commodity futures and option trades. China is among the top in the global metal-related derivatives contracts, but is nowhere near the ranking chart of energy-related derivatives contracts.

II. Status quo of global crude oil market and pricing regime

The consumption of petroleum in Asia-Pacific region grows rapidly. China has surpassed Japan to become the second largest petroleum importer in the world. However, the crude oil trade in Asia still refers to spot commodity for price assessment. There lacks an authoritative benchmark for setting the price of sulfur-contained crude oil.

III. Status quo and prospect of China's crude oil futures

Thanks to the support from the Chinese government, the Shanghai Futures Exchange registered and set up the Shanghai International Energy Trade Center Holding Co., Ltd. in the Shanghai Pilot Free Trade Zone, with the intention to list energy-related derivatives contracts, such as crude oil, natural gas and petrochemical products. Among these, the futures contract of crude oil has been long in the preparation. It targets the global platform for net price trade and bonded delivery, and it will be the first Chinese futures contract available to global investors. Currently, laws and regulations on futures contract of crude oil are in preparation, the phase-1 test of technical system has been completed, and policies in foreign exchange, customs, finance, taxation and commerce are under discussion. It is expected that with the official opening of the Shanghai International Energy Trade Center, the crude oil futures will be listed in the coming days.