China plans to list government bond futures in September.
The China Securities Regulatory Commission (CSRC) announced in a press conference last Friday that the State Council, the Chinese government’s cabinet, has authorised the China Financial Futures Exchange (CFFE) to launch treasury bond futures.
According to the CSRC, the new futures will help to manage the price fluctuations of treasury bonds, as well as deepen the reform of the financial market.
China issued treasury bonds worth 1.39 trillion renminbi in 2012. At the end of last year, China’s public debt stood at 7.42 trillion renminbi, less than 15% of the country’s GDP.
At present, CFFE offers just one futures product, CSI 300 index futures, which has been available since 2010. Its impact has been lessened by a product introduced by the Singapore Exchange (SGX) at around the same time. Singapore’s listing of an index future contract representing 50 listed companies in China has been popular and in the last year China A50 futures trading in Singapore tripled to 1.7 million contracts.