The Dalian Commodity Exchange should consider rolling out crude oil futures for the Northeastern Asian market so that financial tools can better serve the real economy, said a plan released on Tuesday.
The proposal is part of a plan for high-quality development in the coastal area in Liaoning province released by National Development and Reform Commission, the country's top economic regulator.
The proposed study to explore crude futures will be part of the Dalian Commodity Exchange's development for product innovation and deepened opening-up, said the plan.
Crude oil futures were first launched at the Shanghai Futures Exchange in March 2018. For more than three years, the product has become the world's third-largest in terms of trading volume. It has also become a pricing benchmark in the Northeast Asian oil market, which is especially true since the COVID-19 outbreak, said industry experts.
Cooperation between the futures and spot markets should be further deepened at the Dalian Commodity Exchange. A registration center for commodities' warehouse receipts should be set up, while over-the-counter businesses should also be explored steadily. The positioning and mapping of the energy exchanges in the coastal area should be adjusted and optimized to improve the exchanges' business scale and service quality, the plan stated.
During a visit to the Dalian Commodity Exchange on Sunday, Li Lecheng, acting governor of Liaoning province, said that the exchange should make continued efforts toward innovation to provide more products to the market and better serve the real economy. It is integral to Liaoning's further opening-up and market evolution, he said.
Meanwhile, addressing the Shanghai Stock Exchange Global Investors Conference 2021 on Monday, Fang Xinghai, vice-chairman of the China Securities Regulatory Commission, said the country's futures market will be further opened up so that international investors will be provided with more diversified choices and risk management tools.
The financial market will play an important role in the high-quality development of Liaoning's coastal area, the plan stated. On one hand, financial institutions should provide more credit for privately owned enterprises, especially small and medium-sized enterprises.
Loans provided based on SMEs' credit should be more widely promoted. Credit information should be shared among the six cities in Liaoning's coastal area. Insurance companies should play a larger role in the area's development.
Also, direct financing channels should be further expanded. Qualified companies in Liaoning's coastal area should be supported to go public or issue bonds.
Financial services should be further improved to better facilitate the development of companies specializing in energy reservation, environmental protection and clean energy in the area, said the plan.
Covering a total land area of 56,500 square kilometers, the coastal area of Liaoning is made of six cities, including Dalian, Dandong, Jinzhou, Yingkou, Panjin and Huludao. The area also boasts a coastline stretching 2,920 kilometers. The six cities' combined GDP was 1.2 trillion yuan ($188 billion) in 2020.
According to Liang Qidong of the Liaoning Academy of Social Sciences, the high-quality development of Liaoning's coastal area will enhance the opening-up of China's northeastern part and help the country better participate in the economic cooperation of Northeast Asia.