Chinese Online Class - HK party seeks oil futures market

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BIZCHINA / News

HK party seeks oil futures market

By Lillian Liu (China Daily)
Updated: 2007-07-12 07:50

The establishment of a vibrant oil commodities futures market in Hong
Kong will not only help the city strengthen its position as an
international financial center but also assist the mainland fuel its
economic development, said a leading Hong Kong political party.

The stock market in Hong Kong has seen robust growth in recent years,
thanks to the fast-recovering economy. The futures market, however, lags
far behind. A vibrant commodity futures market will provide a powerful
thrust to the territory's economy, said Democratic Alliance for the
Betterment of Hong Kong (DAB).

The party's economic affairs spokesman, Chan Kam-lam, said that after
thorough research, the party has found a commodities market will benefit
the city greatly.

"Particularly in the oil sector, because the fast-growing mainland
economy generates an increasingly high demand for oil," said Chan. "China
relies heavily on oil and consumes large amounts of it but plays a
relatively smaller role in the global oil market."

If a sound oil futures trading system were built up in the city, Hong
Kong would dominate the world market "like New York and London", he said.

DAB has said in a report that Hong Kong will make a perfect complementary
futures trading partner to New York and London given its rich talent
pool, the city's status as a global financial hub, its dynamic banking
system and its experience in risk management .

The party said it has prepared an extensive report on the subject and
will submit it to the central government.

"We have discussed the proposal with officials of the Hong Kong
government, including Financial Secretary Henry Tang, and have received a
very positive response," said Chan.

The party hopes to talk with the mainland authorities and urge the
National Development and Reform Commission to consider the proposal.

In the last three years, the mainland has overtaken Japan to become the
second-largest oil consumer, next only to the US. China's oil demand has
been doubling every 10 years, according to the International Energy
Agency.

(China Daily 07/12/2007 page15)

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