SHANGHAI May 16 (Reuters) - China will set up an international energy trading centre in its Shanghai pilot Free Trade Zone (FTZ), which will host the country's first-ever trading in crude oil futures, the China Securities Regulatory Commission (CSRC) said on Friday.
The CSRC, which supervises the securities and commodities futures markets, has also approved the Shanghai Stock Exchange to set up a platform to trade "international financial assets" in the FTZ as part of government policy to support the zone, a spokesman for the regulator told a weekly news conference.
The regulator has also pushed Chinese brokerages and fund asset management firms to set up branches in the zone, with about a dozen of such subsidiaries having now been established there, the spokesman said.
"The CSRC will in the future continue using the capital markets to support the construction of the Shanghai FTZ, " the spokesman said, adding that market-oriented practices in the zone would then be copied to other parts of the country.
The construction of the energy centre, with a paid-in capital of 5 billion yuan ($8 billion), has so far made the most progress, with preparations of its market and technical mechanisms having been initially completed, the spokesman said.
The announcement is one of a series by FTZ officials in Shanghai, who have been stung by public criticism - including from Chinese state media - that they have been too cautious in implementing reforms.
The so-called "negative list" of sectors and activities banned for foreign investors in the FTZ was likely to shrink to about 130 items this year from the current 190, Zhang Hong, director of the fiscal and financial section of the FTZ management commission, told a news conference on Tuesday.
However, details on which items would be removed from the list were not disclosed. Investors have complained that the list is still too long, and regulators continue to block investments not explicitly prohibited by the list, including the establishment of commodities warehouses by foreign commodities futures exchanges.
Early announcements hyping the zone as the biggest reform since the establishment of the special economic zone in Shenzhen in the 1980s have since been criticised as over-selling it. While the headlines promising deep financial reforms helped set off a property bubble in the zone, economists questioned the feasibility of enacting deep reforms to interest rates and currency regimes without setting off a massive arbitrage spree.
And a PS
China is succeeding today because they have ruthlessly exploited their own peasantry labor, while forcing progress with little regard to human rights or rule of law, all while grasping firmly to the mechanics of international finance and trade.
Personally, I'd be a little more impressed if you'd held India up as your example, a vibrant democracy formed of extremely disparate peoples which respects their citizens enough to grant freedom of press, rights of law, freedom of movement and economic choice. Yes, their economy hasn't sizzled as hot as China, but it is doing quite well. And it is doing well without lining people, mostly children, up in Tianemen Square and executing them by the thousands
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