Futures market, market price system and China's economic growth
The early history of the futures market, in common parlance, is the history in which farmers develop long-term contracts with agricultural traders and processors and so to futures trading to avoid their market risks in the future. And present day, its functions of price discovery and risk aversion make it possible for the futures market to play an important role in stabilizing the operation of the market economy.
Unlike the formation of the futures market in developed countries rely on a free-market system, the futures market in contemporary China is a government-led initiative. The reason is that, to Dr Qing Chang, this is an implication of national conditions in the early days of China's reform and opening up.
Dr Qing Chang is one of the founders of China Futures. He joined the Development Research Center of the State Council in 1985, mainly engaged in research on price theory and policy. Since 1988, he began studying the futures market. He was Secretary-General of the Futures Market Research Working Group at the Development Research Center of the State Council-State Commission for Restructuring the Economic System of the People's Republic of China, for the early pilot work. In 1993, he founded Jinpeng Futures Brokerage Co., Ltd., and he was elected the vice president of the China Futures Association in December 2000. Since 2005, he has been a professor in economics and Director of the Research Center for Futures and Financial Derivatives of China Agricultural University.
With 30 years the development of China's futures market to serve the real economy, the variety of futures market has been increasing, and the scale has been growing. The marketed products of futures and options in China now have up to 70, which covers the main fields of the national economy, such as agriculture, energy, chemicals and finance. As an important part of the modern market economy system, the futures market has become one of the key successes of China's economic reform and opening up.
China's futures market has achieved in three decades what took developed countries centuries to achieve. As one of the designers of the early futures exchange, Dr Chang has always been so proud of the achievement. At the same time, he also thinks that the achievement is the result of the joint efforts of a group of founders and a large number of practitioners in the field of futures. Compared with the “The Founder or Father of China's Futures, “he prefers to be called” The Participant of China's Price Reform.”
How is the current position of the futures market in China's economic growth? In Dr Chang's view, its establishment and development were not carried out in isolation, but with government-led reform of the price system. That is to say, playing a supportive role of the price reform, the futures market is used to price the basic commodities, and go on to develop China's commodity pricing system. In this sense, the development of the futures market has successfully promoted the reform of the price system, which in turn has accelerated the formation of the market economic system, and thus has promoted the sustained, sound and rapid growth of China's economy.
What contributes to China's futures market? What are the challenges facing it in the future? Does China have the formation and development experience of the market price system that other developing countries could emulate? To this end, we invited Dr Chang to write a review paper with the title “Late-mover Advantages and Disadvantages in China's Futures Market” to readers.
