A Case Study Of Internationalization Of Iron Ore Futures In Dalian Commodity Exchange

As the world's second largest economy,China needs to open up the capital market to further integrate into the world economic system.The internationalization of futures market is imperative.In addition,China has the largest iron ore imports in the world,and China has suffered severe losses due to the lack of pricing power in the iron ore trade.Therefore,on May 4,2018,the DCE introduced overseas traders,officially marking the beginning of the internationalization process of iron ore futures.But so far,the number of overseas participants has not yet reached the expectation,and geographically,these overseas participants are mainly from Hong Kong,Singapore,Australia.There are no institutional participants from Europe and the United States.So it will reduce the international influence of China's iron ore futures prices.Therefore,how to enrich the types of participants in China's iron ore futures market,and increase the number of foreign traders is an urgent problem to be solved.This paper studies the case of internationalization of iron ore futures in DCE.First of all,the author has combed the actual development of the internationalization business,described the reasons and purpose of it,and introduced what measures have been taken by DCE to initiate iron ore futures international business and summarize the problems: the number of overseas traders is insufficient,and introducing different types of traders is in a dilemma.Secondly,by comparing domestic and foreign futures market,the paper analyzes the causes of the existing problems: target positioning and mode selection are not targeted,trading system is incomplete,futures brokerage system is not competitive,futures companies are less internationalized,and the structure of domestic participants is imperfect.Finally,based on the above viewpoints,this paper proposes solutions for DCE to further attract foreign traders: on the one hand,DCE should adjust and supplement the corresponding rules,which includes the account opening process,settlement,margin,foreign exchange and delivery systems,to introduce industrial investors with hedging needs(such as iron ore traders),and then gradually introduce other types of overseas customers.On the other hand,this paper proposes a long-term plan for the construction of the futures market.