Financial futures could be creeping back on to the agenda in China, as a former president of the China Securities Regulatory Commission recently advocated their launch in the near future.

According to China’s official news agency Xinhua, Zhou Daojiong said on November 9 that stock index futures should be launched “as soon as possible” as, despite turbulent markets, “the nation’s economic fundamentals remained unchanged and domestic companies still expected sound development prospects despite a changing world economic environment.”

Meanwhile, the China Daily has quoted an unnamed source at China International Capital predicting a January 2009 launch for equity futures. However, no official announcement has been made and various earlier launch targets have been missed.

In the same news agency release as Zhou’s comments, the current CSRC chairman’s assistant Jiang Yang said that China was in the process of finalising regulatory oversight of “contract design, investors’ training and risk control” for equity index futures on the China Financial Futures Exchange.

The CFFE was launched two years ago but has yet to list a single product.

International observers told Futures and Options Intelligence they believed the release of Zhou’s comments through Xinhua suggested he was close to strategic thinking in China’s regulatory apparatus. One described the comments as “a kite-flying exercise”.

But one Asian futures broker was wary of being enthusiastic. “After all this time I don’t see some support from an ex-regulator, even if it comes through official channels, as a great step forward,” he said.

There is also confusion at Jiang’s claims that CFFE oversight is still in development. FOI reported in July 2007 that the exchange’s trading rules had received regulatory approval. The exchange has a full membership list and has been mock-trading the index futures for over a year.