Asia/Pacific News
Chinese Commodities Futures Market Will Include Bunkers, Needs Tax Incentives
The head of the Shanghai Futures Exchange (SHFE), Yang Maijun, Monday said the Chinese Government should consider providing tax incentives to foreign participants in order to encourage them to trade new commodities futures, including bunkers, set to be offered on the exchange, Reuters reports.
The Government should waive income tax and value-added tax for intentional investors trading in the new commodities futures, he said.
According to the report, Yang made the comments to the Chinese financial paper Shanghai Securities Journal on the sidelines of China's annual parliament meeting.
In December, the Government approved the launch of crude oil futures allowing foreign participation on the SHFE, with fuel oil futures trading set to be offered as well.
No actual launch date has yet been set, however.
In addition, the Government is seeking to expand the offering to include other commodities, something which Yang said could duplicate the process for oil futures.
The new contracts will be traded in Renminbi but international participants will be able to set up foreign currency accounts with the SHFE.
China is said to be the world's largest consumer of a range of commodities, but the report suggests the country has relatively little influence over market prices since its markets have been closed to international trading.
In February, independent Chinese oil firms were said to be preparing for liberalisation of crude oil importation into China.
