The development of gold futures trading, as well as other commodities, will be as a major task for the China Securities Regulatory Commission (CSRC) this year, Shang Fulin, chairman of the CSRC said Saturday in a meeting in Beijing.

This is the first time the CSRC publicly expressed its support for gold futures trading in China. The Shanghai Gold Exchange (SGE) is accelerating the approval process.

Song Yuqin, Vice President of SGE previously told Interfax that although the SGE has set up a complete technical system for futures trading, it still needs coordination among different government departments and must comply with complicated regulations and policies.

China's futures trading is under the supervision of the CSRC, while the gold market is monitored by the People's Bank of China, the country's central bank.

There are over 200 members now in Shanghai Futures Exchange, among which about 80% are futures brokerage firms. And the exchange has already set up more than 250 distant trading terminals nationwide.

In addition to gold, the CSRC will actively develop futures trading for crude oil and financial derivatives in 2007. Futures and options trading for zinc, plastic and steel products will be approved at the appropriate time, Shang said in the National Securities and Futures Supervision Workshop held in Bejing Saturday.

At present, futures contracts of four products copper are listed for trading: copper, aluminium, natural rubber and fuel oil.

Commentary:

Gold and metals futures trading in one of the largest consumer and producing countries is an absolute must. Getting over the hurdles of policy and regulation has been the major stumbling block but, now that the CSRC is backing the move, it may well prove possible this year.

As for crude oil, open futures trading is unlikely to be introduced while government price controls are in place.