After many false starts, the sleeping dragon could be waking, finds William Mitting.
Napoleon once famously referred to China as a sleeping
dragon. "Let her sleep," he is reported to have said. "For when
she wakes, she will shake the world." After almost 20 years of
being closed to foreign participation in its futures markets,
China is readying to open its doors to foreign investment once
In a matter of weeks, the once in a decade change of
leadership within China will take place. Exactly when is not
yet clear, like many things in China, the transition of
leadership is an opaque process. However, Xi Jinping the man
who is expected to become the new premier is believed to be an
advocate of further expansion of Chinese markets and to
continue to slow trend towards openness. His appointment may
well confirm that after many false dawns, China’s
markets are opening up once more.
Futures in China are big business. In the year to date, over
1bn contracts have changed hands on the four Chinese exchanges
on less than 30 contracts. Between 2000 and 2010, volumes grew
from 4m to 1.6bn. In July this year the Soy Bean contract on
the Dalian Commodity Exchange briefly became the
world’s most traded exchange traded derivatives
contract. Now, for the first time in the modern era of futures
trading in China, the markets appear to be opening for both
inbound and outbound trading.
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