Hong Kong Exchanges and Clearing Limited (HKEX), today (Thursday) held a forum at its planned Qianhai Mercantile Exchange (QME) in Mainland China as part of the LME Asia Week 2017 programme.
The forum was kicked off by Wang Jinxia, Deputy Director General of the Authority of Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone (the authority of Qianhai) and HKEX Chief Executive Charles Li. Approximately 300 people from the global metals community attended the forum.
QME Chief Executive Guo Xiaoli and HKEX Chief China Economist Ba Shusong delivered keynote speeches at the forum. HKEX Managing Director and Head of Mainland Development Mao Zhirong and Co-head of Market Development Li Gang chaired the forum's morning and afternoon sessions respectively.
In his speech, Charles Li said QME is an important part of HKEX's strategy. "True global financial centres have multi-asset class capabilities, and the QME is our next big step in diversifying our business," he said. "Internationally, we bought the LME to give us instant credibility and know-how. In Mainland China, the QME is a project we are building from scratch to address that particular market's needs. In time, we’ll also explore the cross-listing of commodities derivatives as part of the Connect programme."
Mr Li said HKEX chose to build its onshore commodities platform in Qianhai because of its convenient location, the long history of cooperation between Hong Kong and Guangdong businesses and the absence of a central commodities market in southern China.
"QME is using the London Metal Exchange's (LME, a wholly-owned subsidiary of HKEX) successful model and HKEX's experience in Mainland China to create and operate a commodities platform in Qianhai that serves the Mainland's real economy, filling a market vacuum, and meeting the needs of producers and industrial users in the Mainland commodities market the way the LME supports those two groups in the international market," Mr Li said.
QME Chief Executive Guo Xiaoli explained the positioning of the planned commodities platform from three levels. "On the operating level, QME will provide daily trading and physical delivery services. On the function level, it will support Mainland China’s real economy. On the Connect level, the platform will have roots in Shenzhen and Hong Kong and an international outlook," said Mr Guo.
Mr Guo also said the work crucial to building QME into an effective platform has five key facets: establish reliable warehousing facilities that have both convenient logistics and credibility, based on an LME-style warehouse and delivery model; use the LME model to encourage the development of brokers who can provide comprehensive services; promote self-discipline by market participants; offer relevant products; and create a one-stop shop that can provide tailor-made products and services to suit the needs of enterprises that use commodities.
Notes to editors:
- Charles Li published a blog today titled "Taking the first step towards building a long-term commodities platform in China"
- Full text of Guo Xiaoli's speech is available on the HKEX group website (in Chinese only)
- Introduction to the QME logo