China broadens foreign access to financial, commodity derivatives market

SHANGHAI, Sept 2 (Reuters) – China opened its financial and commodity markets further to foreign investors on Friday, allowing qualified overseas institutions to trade broadly domestic futures and options instruments.

The move is part of the Beijing’s plan to liberalize its vast capital market, the world’s second-largest, and to deepen China’s pricing power in commodities such as crude oil and iron ore.

The China Financial Futures Exchange said in a statement it allowed foreign access to stock index options.

Targeted investors are those under the Qualified Foreign Institutional Investor (QFII) scheme and its yuan-denominated sibling, RQFII.

The two groups of investors have been allowed in stock index futures trading since November of 2020.

Also on Friday the country’s key commodity exchanges announced a wider range of products open for foreign participation.

These include crude oil, low sulfur, fuel oil, rubber and copper on the Shanghai International Energy Exchange, soybean and iron ore on the Dalian Commodity Exchange, and copper and aluminum on the Shanghai Futures Exchange.

Contracts on the Zhengzhou Commodity Exchange, such as PTA, methanol, sugar and rapeseed oil, are among the ones opening up.

(Reporting by Shanghai newsroom; additional reporting by Chen Aizhu in Singapore; Editing by Frank Jack Daniel, William Maclean)