(Yicai Global) Feb. 1 -- Shanghai is proposing a pilot of Chinese yuan/foreign exchange futures contracts, the development of freight derivatives and the listing of refined oil and natural gas futures products as part of the city’s ambitions to become an international financial hub with global influence.

Shanghai will push through a Foreign Exchange Trade System to pilot yuan/forex futures and provide more risk-hedging support for foreign investors holding yuan assets, the municipal government said in a set of proposals on Jan. 30. It will look in particular at opening treasury bond futures, it added.

As part of the country’s 14th Five-Year Plan, which runs from 2021 to 2025, the city will establish a yuan financial asset allocation and risk management center to push forward the development of inter-bank interest rates and foreign exchange derivatives instruments in order to construct a series of futures products and expand the range of institutional investors, it said.

It will set up a nationwide commodity warehouse receipt registration center to support the development of freight derivatives through derivatives trading, settlement and information platforms.

It will give the city’s International Energy Exchange a bigger role to play in promoting the listing of refined oil and natural gas futures products. It will also support the Shanghai Petroleum and Natural Gas Exchange to build an internationally influential oil and gas pricing center in the Lingang New Area, part of Shanghai’s free trade zone, and explore the spot trading of international-bonded low-sulfur fuel oil.

The city will improve the products and services on the gold market by strengthening the international influence of "Shanghai Pricing." It will support the extensive use of "Shanghai Gold", "Shanghai Oil" and "Shanghai Copper" benchmark prices in the international financial market, enhance the price influence of important commodities and help the Shanghai Futures Exchange to explore the establishment of a national commodity warehouse receipt registration center.

Editor: Kim Taylor