BEIJING, Jan. 8 (Xinhua) -- China's securities regulator said Friday the State Council had approved "in principle" the launch of index futures and given it the green light to pilot the margin trading business.
Its introduction was aimed to boost the stable and healthy development of the capital market, said an official with the China Securities Regulatory Commission (CSRC). The move came after the benchmark Shanghai Composite Index surged 80 percent in 2009 after tumbling 65 percent in 2008.
"This is a milestone in the development of the country's capital market", said Xu Ling, general manager of Haitong Futures. It would help reduce wild fluctuations in the stock market, he added.
The view was echoed by Zhao Xijun, deputy director of the Institute of Finance and Securities at Renmin University of China. He added "this also means more investment options for investors".
The regulator would select the first batch of securities companies for the margin trading business soon, based on their net capital, risk control and regulatory management, said the CSRC official.
Margin trading allows securities companies to lend stocks and money to investors, which would interest companies with abundant capital, such as CITICS Securities.
The pilot program would be gradually expanded according to its progress, said the official, offering no specific timetable.
It would take about three months to prepare for the launch of stock-index futures, a long-awaited futures item, according to the CSRC.
The CSRC would prepare a series of standards which investors would have to meet, an entry-permit for financial institutions, as well as guidelines for approving futures contracts and opening of investors' accounts.
"It is very good time to introduce index futures," Xu said, adding the stock market was expected to handle its introduction well as the fallout of the global financial crisis was fading and China's economy was recovering.
Analysts said that the launch of the index futures would help boost blue chips and investors would have tools to hedge or speculate. Li Xunlei, chief economist with Guotai Junan Securities said the index futures would guide more capital to blue chip stocks.
Li also said the market should react rationally towards the launch of margin trading given that the trial run would likely only be small in scale.
China's central bank governor reaffirms moderately loose monetary policy for 2010
BEIJING, Dec. 31 (Xinhua) -- Zhou Xiaochuan, governor with the People's Bank of China, or the central bank, reiterated Thursday that the bank will maintain the moderately loose monetary policy in 2010 and improve the focus and flexibility of the policy according to circumstances.
More credit support should go to promoting employment, strategic emerging industries, and industry transfer, Zhou said in a New Year Address to the People's Bank of China. Full story
China moves to rein in irrational gov't investment
BEIJING, Jan. 7 (Xinhua) -- China publicized draft regulations for government investment Thursday to solicit public opinions, a move expected to better regulate investment and improve investment efficiency.
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A customer checking out a model of a real estate project in Shenzhen, Guangdong province. Property prices in China's 70 major cities rose at the fastest pace in 16 months in November. (China Daily/Qiu Daocen)
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China's central bank to use policy tools to manage inflation, property risks
BEIJING, Jan. 7 -- China's central bank Wednesday said it will manage inflation expectations and keep a close watch on the property market through its credit and money supply policies.
In a statement on its website, the People's Bank of China (PBOC) said it would try to maintain ample liquidity in the financial system, and ask banks to lend more evenly, while strictly implementing credit policies in the property sector. Full story
Premier Wen says science, technology key to China's economic development
BEIJING, Dec. 27 (Xinhua) -- Premier Wen Jiabao said here Sunday that China would rely on science and technology to change its growth pattern.
"It (science and technology) is key to China's economic development," Wen made the remarks when asked how China would respond to global scientific innovation expedited by the international financial crisis. Full story
Premier: China to steadily advance reform of household registration system
BEIJING, Dec. 27 (Xinhua) -- Chinese Premier Wen Jiabao said Sunday China would advance the reform of its decades-long household registration system in a steady manner, in a bid to ensure migrant workers to have equal rights as city dwellers.
Those policies are also key to speeding up urbanization and boosting domestic consumption, Wen said in an exclusive interview with Xinhua News Agency. Full story
China won't yield to yuan appreciation pressure: Premier
BEIJING, Dec. 27 (Xinhua) -- China would not yield to pressure for the appreciation of its currency yuan, or renminbi, in any form, Chinese Premier Wen Jiabao said Sunday.
"A stable Chinese currency is conducive to the international community," Wen told Xinhua in an exclusive interview. Full story
Improving people's livelihood always a priority: Premier
BEIJING, Dec. 27 (Xinhua) -- The Chinese Premier Wen Jiabao stressed on Sunday that the final ends of the nation's economic growth is to improve people's well-being, which is a priority on the government's agenda amid the global financial crisis.
Despite the tight fiscal condition, China beefed up the income and welfare enjoyed by the retirees and low-income residents, and unveiled the significant health-care reform in 2008, Wen told Xinhua in an exclusive interview. Full story
Chinese Premir stresses confidence, responsibility, cooperation in tackling downturn
BEIJING, Dec. 27 (Xinhua) -- Chinese Premier Wen Jiabao said Sunday the government had stressed confidence, responsibility and cooperation in dealing with the effects of the global economic crisis. Full story
Special Report: Global Financial Crisis
