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Lately, Dalian Commodity Exchange (DCE) held a symposium on futures market’s serving of the real economy in Beijing and views have been exchanged at the symposium on implementing the spirit put forward at the 3rd Plenary Session of the 8th Communist Party of China Central Committee (3rd Plenary Session) and on promoting the futures market to better serve the real economy. Jiang Yang, Deputy Chairman of the China Securities Regulatory Commission (CSRC), attended the symposium and also among the attending were over 40 representatives from the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Commerce, the Ministry of Agriculture, the CSRC and relevant industry associations, the financial departments of local governments, futures companies, and spot enterprises.
At the symposium, Liu Xingqiang, Chairman of DCE, first introduced the situation of DCE in serving the industry and the real economy. He said that DCE has presented distinctive features in serving the real economy through years of development: first, the coverage of its products has been continuously expanded, the service scale has been expanded to such key economic fields as the agricultural and animal products, the oils, the chemical engineering, and the energy minerals; second, DCE is to launch fireboard and plywood in the near future, and it is now studying new products in the energy and chemical industry, the textile, the livestock husbandry, and the agricultural products and will actively promote the research in commodity option and commodity index, so as to provide enterprises with more financial tools; third, the industrial enterprises have become the main force that participate in the market with the position-holding amount of corporate customers taking up 41% of the total; fourth, such series market service activities as the “thousands of villages and households” and the “thousands of factories enterprises” market service programs, the industry conferences on relevant products, and the futures colleges have been formed.
He said that the market functions of DCE are well displayed and its market prices are reasonable and valid, making DCE the price formation and reference center of relevant products in China. As a result, DCE has exerted profound influence on the price-fixing pattern of the industry and promoted the formation of a unified national market. Besides, the futures prices have provided effective reference to the state macro-control and the “DCE price” of some products has begun to take up the leading position in the international price formation system. And DCE’s function in managing market risks has also been effectively displayed. At present, the hedging effectiveness of the agricultural products of DCE is the same with that of the American market in the 1990s and an effective risk-avoiding platform has been provided to the enterprises. And the industry upgrading and the transformation of development mode have been promoted through the selection of contract objects and the design of delivery system.
In reviewing DCE’s serving of the industry and the real economy, Liu Xingqiang believed that serving the real economy is the fundamental driving force to the development of futures market and it has a brilliant future. At present the width, the depth, and the service capacity and level of the market in serving the industry and the real economy are still to be improved. Next, DCE will, guided by the spirit put forward at the 3rd Plenary Session and by ensuring the safe and steady operation of the market, continue to promote innovation in products, tools, and business and to keep optimizing market rules and systems, enhancing market operation quality, and improving market service level, thus implementing the spirit of “giving full play to the decisive role of the market in resources allocation” more thoroughly.
At the symposium, representatives have, by combining their own industry and fields and their functions, made speeches on the development of China’s futures market over the past 20 years, its impact and influence on related industries, and the ideas of supporting the development of futures market. And they also proposed their opinions and suggestions on the further development of the market.
Participating representatives believed that over the past 20 years, the futures market of Dalian and the country has made remarkable achievement during its development and it has played a more and more important role in serving the real economy and laid a solid foundation for displaying the decisive role of the market in resources allocation. As the futures market has gradually begun to serve the “agriculture, farmer, and rural area”, the enterprises’ risk management, and the industry transformation and upgrading, all sectors of the society have had an increasingly higher degree of recognition for the futures market. China is a large commodity production, trading, and consuming country in the world and therefore, it is of great importance for China to improve market system and price system and enhancing its right of speech in commodity pricing, during which the futures market should play a more important role.
As to how the futures market can better develop and serve the real economy, all believed that we should strengthen the theoretical research and market publicizing of the futures market and continue to remove prejudice and even the misunderstanding towards the market; we should launch more commodity futures, speed up to launch option tools, explore to design better financial derivatives, and at the same time, build a multi-storied market system with the mutual complementation and mutual promotion of the spot market, the middle and long term market, and the futures market.; we should also strengthen the training and guidance for key industry enterprises, so as to enable them to make full use of the futures market to increase their own strength and to give full play to their function of stabilizing market, and should study and promote an effective mode for farmers and agriculture-related enterprises to use the futures market; and we should also continue to strengthen efforts on market supervision and risk prevention, so as to prevent that the great price fluctuation caused by irrational market speculation will affect normal market order and to timely respond to enterprises’ appeal in this respect. Representatives also presented their opinions and suggestions on strengthening the research in futures information analysis, establishing early-warning and forecasting mechanism of commodity price information to provide reference and guidance to all parties, focusing on the training of futures talents team, loosening restrictions on enterprises’ participation in futures market, and promoting the opening-up of the market.
At the symposium, participants spoke highly of DCE in actively carrying out various works from the perspective of serving the real economy and they said that they are willing to support and cooperate with DCE to continuously do well in related works and jointly promote the development of futures market and the better service for the industry and the real economy.
