CHINA Trends and Developments Contributed by: Tao (Andy) Qin, Yanhua (Xavy) Xu, Ran (Addie) Cheng and Tianbing (Yasmin) Zhou, DeHeng Law Offices
Overview of Futures and Derivatives Markets China’s futures and derivatives markets have devel - oped steadily amid a complex environment of global economic fluctuations, international tariff adjustments and geopolitical conflicts. According to statistics from the China Futures Market Monitoring Center (CFM - MC), as of the end of July 2025, the total capital in the futures market had reached CNY1.82 trillion, an increase of 11.6% compared with the end of 2024. The market has been operating smoothly, and it con - tinues to expand. The client equity of futures com - panies amounted to CNY1.71 trillion, representing a growth of 18.5% in the same period, among which the equity of industrial clients grew particularly prominent - ly and the participation of real enterprises kept rising. After over three decades of development, China’s futures and derivatives markets have shown improve - ments across many dimensions, most importantly including the improvement of the product system, the enhanced ability to serve entities and the increased international participation of foreign capital. The improvement of the futures and options product system According to statistics from the CFMMC, China’s futures and options product system has been stead - ily improving. As of 27 December 2024, the number of listed futures and options products had reached 146, making the industry more resilient by accurately matching the needs of each segment of the industry chain. Specifically: • Product coverage: China’s futures and options products have expanded rapidly, covering major sectors of the national economy such as agricul - tural products, metals, energy, chemicals, building materials, shipping and finance. This has resulted in a diverse pattern featuring the co-ordinated development of on-exchange and over-the-counter (OTC) commodities and finance markets, as well as futures and options. • National strategic development: The product innovation of China’s futures market is aligned with industrial transformation and upgrading. Futures in recently listed products, such as industrial silicon (a core material for new energy), lithium carbonate (a core material for lithium-ion batteries) and p-xylene
(PX, a core raw material for the polyester industrial chain), have helped stabilise prices in high-end manufacturing and guided capital towards high- efficiency production capacity. • Environmental protection and low-carbon develop- ment: Futures products in the electricity and new energy sectors provide full-chain risk management tools. The listing of futures products such as car - bon emission rights, electricity futures, aluminium oxide futures, low-sulphur fuel oil futures and syn - thetic rubber futures in recent years has promoted the green upgrading of the industrial chain and guided production towards environmentally friendly manufacturing. The enhanced ability to serve the real economy From the perspective of serving the real economy, the futures market has expanded its service to small and medium-sized enterprises (SMEs) and extended cov - erage across the entire industrial chain. For example, by continually optimising the design of futures con - tracts – such as launching mini contracts for SMEs, adding futures delivery warehouses for regional indus - tries, and adjusting contract settings for traders signif - icantly affected by seasonal fluctuations – the market has turned futures into a practical tool that caters to enterprises’ actual needs. Internationalisation of futures and derivatives markets speeds up CFMMC statistics show that the total number of trad - able products available to the qualified foreign insti - tutional investor (QFII) and renminbi qualified foreign institutional investor (RQFII) reached 91 in the first half of 2025. The number of foreign clients rose 17% year- on-year by the end of 2024, with their open interest increasing 28% simultaneously. The motivations for foreign investors to engage in deep participation in China’s futures market include the following: • With the two-way opening-up of China’s capital market, foreign capital is encouraged to participate in more diversified and internationalised futures products, to achieve risk diversification and enrich investment portfolio allocation. • China has advanced the institutional development of its futures market, including close supervision, the margin system, and adjustments to trading
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