Honorable leaders, distinguished guests, ladies and gentlemen:

Good afternoon!

It is a great pleasure for me to be here at Huangpu river side for the 14th Shanghai Derivatives Market Forum (SDMF). Today, Chinese and international representatives from non-ferrous metals and futures industries have gathered here for an in-depth exchange and discussion on the development of China’s non-ferrous metals industry and futures market and other topics. On behalf of Shanghai Futures Exchange (SHFE), I would like to extend our warm welcome and sincere appreciation to all guests attending this forum!

In recent years, the SHFE has steadily carried forward innovation in futures products and developed a wider range of products, covering non-ferrous metals, precious metals, ferrous metals, energy and chemicals sectors that are vital to the national economy and people’s livelihood. According to the US-based Futures Industry Association (FIA), by trading volume in 2016, the SHFE ranked top six among derivatives exchanges in the world and top one among commodities futures and options exchanges in the world, with a market share of 24.18%. In 2016, by data calculated on a one-way basis, the SHFE’s total turnover reached RMB 84.98 trillion, up by 33.71% YoY, and total trading volume stood at 1.681 billion contracts, up by 59.99% YoY, including 420 million non-ferrous metals futures contracts, accounting for 25% of the SHFE’s total trading volume, with a turnover of RMB 45.9 trillion, making up 54% of the SHFE’s total turnover.

As a more mature product range of the SHFE, non-ferrous metals futures have been generally recognized by the industry over the past years due to their rapid growth, the increasing sophistication of their market and the progressive performance of their price discovery and hedging functions. The SHFE has taken a number of fruitful efforts in promoting innovation in and development of the non-ferrous metals futures market.

　　Firstly, the SHFE has boosted innovation in products and diversified the product mix. During more than two years since their official listing on March 27, 2015, nickel and tin futures have seen the stable operation of their market, active participation of customers in their trading, reasonable structuring of open positions in them and continuous improvement of their market functions. The SHFE has carried out in-depth research on its futures product pipeline and continued with R&D on aluminum alloy and alumina futures.

　　Secondly, the SHFE has deepened industry services and facilitated the performance of its futures products’ functions. The SHFE has entered into a strategic memorandum of cooperation with the NDRC’s Price Department and China Non-ferrous Metals Industry Association for comprehensive and in-depth cooperation on such fields as new product development, market training, industry services and collaborative research. Furthermore, to provide greater industry services and train professional talents across the futures and spot markets, the SHFE has worked to propel the development of a non-ferrous metals industry training center and build a professional training platform. In addition, the SHFE has optimized the nationwide distribution of delivery warehouses according to the reality of the domestic non-ferrous metals industry transfer and upgrading and the tendency of its development, by establishing new aluminum futures delivery warehouses in Henan, Chongqing, Shandong and Tianjin. To adapt to the rapid development of Internet technologies and increase the level of IT application and automation in the non-ferrous metals industry, the SHFE has strongly pushed forward the pilot application of the automatic recognition technology to registered non-ferrous metal manufacturers and delivery warehouses and taken various steps to promote the effective performance of the functions of non-ferrous metals futures in serving the real economy. According to the result of an assessment on futures products’ functions conducted by the CSRC’s Futures Department in the second half of 2016, the top eight industrial futures products among those currently listed in China, by the performance of functions, were all SHFE’s metals futures products.

　　Thirdly, the SHFE has explored pathways to boost its internationalization process. Since the creation of the Shanghai Free Trade Zone, the SHFE has lost no time in following the trend of futures market internationalization. Currently, the SHFE has adopted continuous trading wholly for the six non-ferrous metal futures products and aligned its trading hours with those of international markets; steadily implemented the pilot program of the bonded delivery of futures, with a stable growth in the volume of bonded delivery, made breakthroughs in the bonded warehouse warrant pledge business and achieved greater transparency of copper and aluminum inventories in the bonded zone; and continued with the registration of foreign brands, with a total of 39 foreign brands now being successfully registered with the SHFE, including 30 copper, three aluminum, three zinc and three nickel brands.

This year has seen a complex and changing international economic and financial landscape, frequent occurrence of geopolitical incidents and wild swings of commodity markets. Faced with changing domestic and external environments for China’s futures market, the SHFE will further leverage its own strengths to serve the “Belt and Road” Initiative, assist supply-side structural reforms and contribute to the real economy in greater width and depth. As its next step, the SHFE will focus on the following priorities in respect to non-ferrous metal futures: first, the SHFE will enhance supervision of the market.To effectively protect investors’ lawful rights and interests and firmly observe the requirements for regulatory transition, the SHFE will take a host of responsive measures to severely crack down upon illegal activities, clean up the market environment and enhance regulatory efficiency, laying a solid foundation for the stable operation and innovative development of the non-ferrous metals futures market. Second, the SHFE will deepen industry services.The SHFE will work closely with industry associations and local governments to continuously provide more investor education activities, continue with the tasks related to the development of the non-ferrous metals industry training center and further improve the capabilities and competence of industrial companies to reasonably use futures instruments. Third, the SHFE will refine existing products. To accommodate market development and the needs of industrial customers, the SHFE will comprehensively optimize all aspects of its existing futures products from contract terms, delivery model and brand registration to warehouse distribution in order to increase market efficiency. Fourth, the SHFE will promote innovation in products. The SHFE will enhance the R&D of copper options and commodity index futures to strive to achieve their listing at the earliest day possible, thereby further diversifying the risk management instruments. Fifth, the SHFE will further its opening up.Taking advantage of the strategic opportunities brought by the Belt and Road Initiative, the SHFE will consider and carry forward the opening up of China’s non-ferrous metals futures market in a steady and orderly manner in accordance with the CSRC’s overall arrangements. The SHFE will explore the extension of relevant policies on crude oil futures to non-ferrous metal futures which have a more sophisticated market and a highly international spot market to attract the wide participation of domestic and foreign investors, with a view to further increase the international influence of the SHFE’s futures prices.

　　Dear guests, this non-ferrous metals sub-forum has brought together many friends and experts, providing us with an opportunity to understand international non-ferrous metals markets and increase mutual exchange and communication. You are expected to express your views freely and contribute your strengths and wisdom to the sustainable and healthy development of China’s non-ferrous metals industry and the in-depth integration of the futures market with the spot markets in the better interests of the real economy.

Lastly, I wish this forum a complete success!

Thank you!