The push to open up China’s capital markets is taking another step with a joint venture between the Germany’s Deutsche Börse AG (DB), the Shanghai Stock Exchange (SSE) and the China Financial Futures Exchange (CFFE), which aims to help bring trading of Chinese financial products to foreign investors.
The three firms announced that they are undertaking a joint venture to be known as the China Europe International Exchange, which will start operations in the fourth quarter of this year. The SSE and the DB will each own 40% of the new company and the CFFE will hold the remaining 20% of the new company, which will be incorporated in Germany.
The new joint venture will aim to develop and to market financial instruments based on Chinese assets to international investors. The products will be denominated in China’s renminbi currency (RMB), as the firms note that internationalizing the currency is an important strategy in the process of the opening-up of China’s economy and financial services industry. “To promote such a strategy, a well-functioning market with offshore investment and trading opportunities is crucial,” they say.
“In the context of China’s capital market liberalization, the offshore trading platform set up by the three exchanges will further promote the two-way opening up of China’s capital market, enrich the product line of the offshore RMB market and accelerate the pace of RMB internationalization,” said Gui Minjie, chairman of the SSE.