New Shanghai free-trade zone to lead push in futures

Beijing will soon announce a plan to allow foreign commodities exchanges to set up their own futures delivery warehouses in the mainland's first free-trade zone in Shanghai, directly challenging Singapore and South Korea's regional dominance in this business and helping Hong Kong Exchanges and Clearing to expand into commodities trading.

Sources familiar with the situation told the Premier Li Keqiang had recently signed off on this plan, which would be officially announced in the coming days as part of the detailed new rules for the development of Shanghai's proposed free-trade zone.

In the meantime, the central government would also "gradually approve foreign firms to participate in commodities futures trading" in the free-trade zone that would be established in the Pudong New Area, one of the sources said.

These companies could be experienced commodities futures trading houses that already operated in major global futures markets such as London and Chicago, the source added.

On July 3, the State Council officially approved a plan to launch Shanghai's free-trade zone, which is widely expected to be the country's testing ground for major policy reforms to free up cross-border commodity and capital flows.

The cabinet said in a statement after a meeting chaired by the premier that the free-trade zone would be a snapshot of an "upgraded Chinese economy".