A top Chinese securities official said on Saturday that efforts would be made to push forward the development of China's futures market to bring it in line with the country's policy of going all out to advance the capital market.

"The current period is a critical moment in the growth of China's futures market," said Shang Fulin, chairman of the China Securities Regulatory Commission (CSRC), at Saturday's Shanghai Derivatives Market Forum.

The forum, focusing on metals and the energy futures market, was sponsored by the Shanghai Futures Exchange (SFE) to analyze the situation of the current futures market and discuss how to promote its development.

Shang told 400 participants from around the world that China's economic growth had provided solid conditions for the expansion of its futures market.

"But the basis for the market is still weak, and risks exist that should be prevented and solved in order to push forward its steady development," he said.

The CSRC will adhere to the State Council's strategy of promoting, reforming and opening up the country's capital market, of which a healthy futures market is key, Shang said.

China's futures market concluded transactions valued at 14.7 trillion yuan (US$1.8 trillion) last year, up 36 per cent over 2003. Of the deal volume, the SFE accounted for 57 per cent.

"Shanghai's copper futures market is becoming mature and is playing an important role in the global price-making system," he said.

SFE Chairwoman Wang Lihua said the exchange will focus on the development of aluminium futures this year, which it considers a key product.

It will also research and develop financial futures products and metal and energy futures, Wang said.

"Successful business calls for a well-organized and smooth operational system able to provide an effective risk management mechanism and investment opportunities," said Yang Maijun, director of the CSRC's Futures Regulatory Department.

"But China's futures market, at the moment, is far from meeting the economic need," Yang said.

Domestic investors are unsatisfied with business on overseas futures markets, and overseas investors feel the same about the Chinese mainland's futures market, the director said.

"The CSRC will work hard to protect the legal rights of investors by establishing a guarantee fund for them," Yang said, adding that further efforts would be made to put an end to irregularities to maintain market order.

"The CSRC will cautiously open the futures market to the outside world," he said.

Under strict supervision, domestic institutions and personnel, if qualified, are encouraged to conduct futures business overseas.

The CSRC is also considering allowing qualified overseas investors to become involved in the mainland's futures market.

"New policies will be worked out soon to allow investors from Hong Kong and Macao to purchase shares from mainland futures companies," Yang said.

(China Daily May 30, 2005)