'More progress lies ahead' for FTZ

Officials say crude oil futures trading may be the next innovation in zone

Officials of the China (Shanghai) Pilot Free Trade Zone on Friday promised there would be more progress, including the launch of crude oil futures later this year, ahead of the first anniversary of the experimental area.

The Shanghai International Energy Trading Center, a new arm of the Shanghai Futures Exchange, may launch crude oil futures this winter, said Zheng Yang, head of the Shanghai Financial Service Office, at a briefing on Friday.

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The trading center was established last November, and it was the largest company registered in the FTZ with registered capital of 5 billion yuan ($815 million). It aims to serve as a platform for international futures trading of oil and other resources.

According to Zheng, the energy trading center is preparing for the launch of crude oil futures.

The Shanghai Stock Exchange also plans to set up a trading platform for international financial assets, said the official.

The FTZ was officially launched on Sept 29, 2013. Its major achievement in the past year has been the streamlining of administrative procedures.

The "negative list" approach, which aims to make it easier for foreign companies to enter the Chinese market, has reduced the number of banned items from 196 to 139.

As of Sept 15 this year, there were 12,266 new companies set up in the FTZ, of which foreign companies accounted for 13.7 percent, and 283 foreign-funded projects were launched in the FTZ.

"The momentum of foreign enterprises is improving, which means the free trade zone has passed the initial evaluation," said Ai Baojun, director of the FTZ, who is also deputy mayor of Shanghai. Ai said logistics costs in the zone have declined by 10 percent.

In late October, the FTZ management committee will release another list that will refine its power and procedures, increase transparency and broaden market access for investors in the FTZ.

When asked about Dai Haibo, the former executive deputy director of the FTZ who was removed in early September, Ai said Dai's removal was a normal change of personnel, and Dai was still carrying out his duties in the government, such as drafting the 13th Five-Year Plan (2016-2020).

Ai did not reveal the successor to Dai.