In another measure to set up global trading commerce for several commodities, Shanghai's pilot free trade zone has drafted new rules for spot transaction of goods.
The draft of rules, which was composed of 48 items, laid out pre-requisites for participants in the trading market, including procedures, regulations for handling funds, goods distribution and risk control methods.
"The release of the draft is a step toward building international resource allocation platforms for energy products, raw industrial materials and agricultural products," said China Pilot Free Trade Zone Administration on its website.
The FTZ will allow transactions of receipts from warehouses, bonded goods and bills for storing of unclaimed commodities. The prices of goods that can be traded inside the FTZ should exclude value-added and import levy taxes. The transaction of goods will be based on yuan quotations and settlements.
To avoid mix ups, employment of third-party firms to handle custody of the currencies, fund settlement and storing of the commodities will be required for the market operators trading in the FTZ.
Under the new set of draft rules, enterprises that are involved in commodities processing, production and trading are qualified to be commodity dealers, regardless if they are foreign or domestic firms.
Public opinion, suggestions and comments on the new set of draft rules are accepted until Oct. 27.
Meanwhile, the FTZ has also established a global gold board in order to amplify China's presence in the international gold market.
Planning to become a global trading hub by 2015, the Shanghai government will soon establish eight global trading platforms for gas, cotton, liquid chemicals, oil, silver, iron ore, non-ferrous metals and bulk goods.