Yuan Oil Futures to Start Trading

[TaiShang]

The first step to crush the Dollar Dominance is made!!! And, it'll rattle the USA herself!!! No wonder some folks in California is already asking for a separate country...

The empire will fight back tooth and nail for sure. It will be only a steeper fight for China. Let's hope our Mainland is ready and firm.

The Western neo-fascist media is warming up. There has been an increase in anti-BRI news in the uni-body Western media recently. No coincidence perhaps.

 

[Götterdämmerung]

The empire will fight back tooth and nail for sure. It will be only a steeper fight for China. Let's hope our Mainland is ready and firm.

The Western neo-fascist media is warming up. There has been an increase in anti-BRI news in the uni-body Western media recently. No coincidence perhaps.

Our "free media" is steadily losing the war, at least from my observation, particularly in Germany. Whenever I read news about BRI, the majority of comments are pro BRI. In fact, most are against anything Nato or US.

 

[Taimoor Khan]

Good luck China. Hope this goes a long way to give world a parallel economic system to use where nation states feel pressure from American lead dollar based system. Next step would be to have rival system in place for SWIFT.

 

[Hakikat ve Hikmet]

Good luck China. Hope this goes a long way to give world a parallel economic system to use where nation states feel pressure from American lead dollar based system. Next step would be to have rival system in place for SWIFT.

Hopefully this Firaunic system - where might is right- will come to an end!!! I want this specifically for my kids who can live in the USA without the stigma of trampling on the blood and sweat of billions of folks just for the sake of a handful of vampires who are against the US folks and ideals at the first place...

 

[JSCh]

MARCH 29, 2018 / 6:58 PM / UPDATED 4 HOURS AGO
Exclusive: China taking first steps to pay for oil in yuan this year - sources
Sumeet Chatterjee, Meng Meng

HONG KONG/BEIJING (Reuters) - China is taking its first steps towards paying for imported crude oil in yuan instead of the U.S. dollar, three people with knowledge of the matter told Reuters, a key development in Beijing’s efforts to establish its currency internationally.

Shifting just part of global oil trade into the yuan is potentially huge. Oil is the world’s most traded commodity, with an annual trade value of around $14 trillion, roughly equivalent to China’s gross domestic product last year.

A pilot program for yuan payment could be launched as early as the second half of this year, two of the people said.


--> https://www.reuters.com/article/us-...r-oil-in-yuan-this-year-sources-idUSKBN1H51FA

 

[Huan]

For the Petro-Yuan oil futures, the Shanghai INE needs to extend its trading hours much more. The breaks between their trading hours are too many and too long while the US WTI Crude Oil Exchange's trading hours are continuous from 8:00 PM-6:00 PM per weekday.

 

[JSCh]

China Focus: China's crude oil futures active in first week trading
Source: Xinhua| 2018-03-30 23:04:24|Editor: Yamei


SHANGHAI, March 30 (Xinhua) -- The price of the main contract of China's crude oil futures settled at 420.3 yuan (76 U.S. dollars) on Friday, 4.3 yuan higher than its listed benchmark price at 416 yuan per barrel.

On Friday, the Shanghai International Energy Exchange (INE) recorded a total of 58,824 transactions of 15 listed crude oil futures contracts, 16,448 more than the first trading day level on Monday.

China launched trading of crude oil futures contracts on Monday in its steady moves to further open up the financial sector.

As the first futures contracts listed on the Chinese mainland to overseas investors, the trading volume gradually increased during the first week with a total of 278,234 transactions, worth 115.92 billion yuan, changing hands by the end of the week.

By Friday, INE had registered over 20,000 trading accounts, among which 25 percent were institutional accounts, and the rest were held by individuals.

"Individual investors made considerable liquidity and showed skills in risk management," said Sun Yonggang, analyst with Chaos Ternary Futures Co., Ltd.

A total of 23 overseas agencies have registered with the INE to provide brokerage services for overseas investors. Analysts said that the futures have shown its price-discovery function and connection with the international market, as the prices of the main contract SC1809 were mostly between the prices of London and New York crude oil markets this week.

On Thursday, the West Texas Intermediate (WTI) for May delivery posted at 64.94 U.S. dollars a barrel on the New York Mercantile Exchange, while Brent crude for May delivery closed at 70.27 U.S. dollars a barrel on the London ICE Futures Exchange. While, INE's main contract closed at 409.7 yuan (about 65 U.S. dollars).

After the U.S. Energy Information Administration released the latest inventory data Wednesday, which rose more than expected, the pricing of INE contracts fell on Thursday, said Xiang Chao, analyst with Yongan Futures Co. Ltd.

The financial market showed concerns about trade friction between China and the U.S., causing crude oil prices to move up and down frequently, said Xiao Wei, analyst with CCB futures.

He predicted that with the improvement of liquidity and investors' structure, the market expectation will be better reflected through the Shanghai crude oil futures.

According to China Securities Journal, the INE prices will be the valuation benchmark of physical deliveries made by Shell to China International United Petroleum & Chemicals Co., Ltd. from September.

 

[Adam WANG SHANGHAI MEGA]

It's time though but Chineses do not need to prove anything to the outside world. China just needs to make itself stronger and stronger, and other changes will naturally happen.

 

[jhungary]

It's time though but Chineses do not need to prove anything to the outside world. China just needs to make itself stronger and stronger, and other changes will naturally happen.

The problem is, this move will only make China weaker not stronger, that is why people generally trade oil with USD.

Think about it, how China is going to have the extra cash to pay the oil debt in RMB instead of USD? You are talking about for now, it's around 16 billions extra RMB, either you print it and inflate your currency or you buy some other currency to balance the currency trade, in this case, China is buying more USD than ever.

There is a reason why China buy 160 billions US Debt more in 2017 and 2016 and officially replacing Japan as the largest US National Debt holder. If you want to ask why the People Army can only spare 180 billions in defence and not 350 billions? That's because the Chinese government use that 160 billions to buy the US debt and funded the US war machine. The more China settle the "Petrol-Yuan" is actually do more good than harm to the USD in the immediate term, because China have to find a quick currency to balance out the extra RMB spend on oil, and there are currently only 1 currency in the world can do that, and that is the USD.

 

[my2cents]

The problem is, this move will only make China weaker not stronger, that is why people generally trade oil with USD.

Think about it, how China is going to have the extra cash to pay the oil debt in RMB instead of USD? You are talking about for now, it's around 16 billions extra RMB, either you print it and inflate your currency or you buy some other currency to balance the currency trade, in this case, China is buying more USD than ever.

There is a reason why China buy 160 billions US Debt more in 2017 and 2016 and officially replacing Japan as the largest US National Debt holder. If you want to ask why the People Army can only spare 180 billions in defence and not 350 billions? That's because the Chinese government use that 160 billions to buy the US debt and funded the US war machine. The more China settle the "Petrol-Yuan" is actually do more good than harm to the USD in the immediate term, because China have to find a quick currency to balance out the extra RMB spend on oil, and there are currently only 1 currency in the world can do that, and that is the USD.

Now when China trades in Yuan, there will be more Yuan available with oil exporting countries. They will use Yuan to balance out their payments with China. In effect it will drive down Yuan which would make Chinese goods more affordable and should be good news for their export driven economy. Yuan will be next reserve currency for sure whether we like it or not.

 

[jhungary]

Now when China trades in Yuan, there will be more Yuan available with oil exporting countries. They will use Yuan to balance out their payments with China. In effect it will drive down Yuan which would make Chinese goods more affordable and should be good news for their export driven economy. Yuan will be next reserve currency for sure whether we like it or not.

How do you get more Yuan to begin with?

Say in 2017, there are 2 trillions of Yuan in circulation in the whole China (this is an arbitrary number), and they are used to satisfy payment within and outside China, now in 2018, when Chinese started these Oil Future, they will now need to pay their oil in Yuan instead of USD before.

Whilst paying with USD, the Chinese won't have a problem with that because they don't use USD within China, which mean you can regulate it, but if you start paying with Yuan, you will have to adjust the payment so you can spare an extra 16 billions USD worth of Yuan to settle those debt, and where did you get the extra 16 billions of those 2 trillions in circulation? As there are finite amount of money?

There are only 3 ways.

1.) Print the 16 billions in need to settle the oil trade.

That would mean you will now have 2.016 trillions yuan in circulation, which mean you inflate your currency, which is not good.

2.) Adjust domestic spending, which inhibit economy growth because you will have yo divert the 16 billion oil money from infrastructure building. Again, which is not good.

3.) Buy other debt in an IOU kind of way, that only 1 country is offering this, and that is USA. You buy more US Debt, and then have it convert to Yuan and pay off the balance and instead of holding an actual debt, you are holding US National Debt. Which is what the Chinese is doing at the moment.

Now imagine the oil future is not 16 billions as it started now, which is still manageable, what if it is somewhere in trillion mark, can China print 1 trillions Yuan extra to pay for oil? Nope. So as this growth larger, it will depend on US Dollar more, because there are only one debt they can buy freely in the world, and that is the US dollar, unless some one is willing to buy Yuan-Bond to finance the Chinese oil, until country like Japan and UK or even US flock to buy Yuan bond, I don't actually see this happening in a long time.

 

[my2cents]

How do you get more Yuan to begin with?

Say in 2017, there are 2 trillions of Yuan in circulation in the whole China (this is an arbitrary number), and they are used to satisfy payment within and outside China, now in 2018, when Chinese started these Oil Future, they will now need to pay their oil in Yuan instead of USD before.

Whilst paying with USD, the Chinese won't have a problem with that because they don't use USD within China, which mean you can regulate it, but if you start paying with Yuan, you will have to adjust the payment so you can spare an extra 16 billions USD worth of Yuan to settle those debt, and where did you get the extra 16 billions of those 2 trillions in circulation? As there are finite amount of money?

There are only 3 ways.

1.) Print the 16 billions in need to settle the oil trade.

That would mean you will now have 2.016 trillions yuan in circulation, which mean you inflate your currency, which is not good.

2.) Adjust domestic spending, which inhibit economy growth because you will have yo divert the 16 billion oil money from infrastructure building. Again, which is not good.

3.) Buy other debt in an IOU kind of way, that only 1 country is offering this, and that is USA. You buy more US Debt, and then have it convert to Yuan and pay off the balance and instead of holding an actual debt, you are holding US National Debt. Which is what the Chinese is doing at the moment.

Now imagine the oil future is not 16 billions as it started now, which is still manageable, what if it is somewhere in trillion mark, can China print 1 trillions Yuan extra to pay for oil? Nope. So as this growth larger, it will depend on US Dollar more, because there are only one debt they can buy freely in the world, and that is the US dollar, unless some one is willing to buy Yuan-Bond to finance the Chinese oil, until country like Japan and UK or even US flock to buy Yuan bond, I don't actually see this happening in a long time.

Their entire oil imports are about 120 billion dollars annually. I see your point about printing Yuan to purchase oil will cause inflation but it is less than 1% of their money supply. They should be able to absorb those inflationary pressures quite easily. Plus they can issue bonds internally until they have mechanism in place to set up a global bond issue. For that they would have to loosen their control of Yuan and make it free floating which is a definite NO for now.

Regarding China financing the US debt, how long do you think it will go on?? As a US citizen myself I am tired of this dependency on China.

 

[Adam WANG SHANGHAI MEGA]

How do you get more Yuan to begin with?

Say in 2017, there are 2 trillions of Yuan in circulation in the whole China (this is an arbitrary number), and they are used to satisfy payment within and outside China, now in 2018, when Chinese started these Oil Future, they will now need to pay their oil in Yuan instead of USD before.

Whilst paying with USD, the Chinese won't have a problem with that because they don't use USD within China, which mean you can regulate it, but if you start paying with Yuan, you will have to adjust the payment so you can spare an extra 16 billions USD worth of Yuan to settle those debt, and where did you get the extra 16 billions of those 2 trillions in circulation? As there are finite amount of money?

There are only 3 ways.

1.) Print the 16 billions in need to settle the oil trade.

That would mean you will now have 2.016 trillions yuan in circulation, which mean you inflate your currency, which is not good.

2.) Adjust domestic spending, which inhibit economy growth because you will have yo divert the 16 billion oil money from infrastructure building. Again, which is not good.

3.) Buy other debt in an IOU kind of way, that only 1 country is offering this, and that is USA. You buy more US Debt, and then have it convert to Yuan and pay off the balance and instead of holding an actual debt, you are holding US National Debt. Which is what the Chinese is doing at the moment.

Now imagine the oil future is not 16 billions as it started now, which is still manageable, what if it is somewhere in trillion mark, can China print 1 trillions Yuan extra to pay for oil? Nope. So as this growth larger, it will depend on US Dollar more, because there are only one debt they can buy freely in the world, and that is the US dollar, unless some one is willing to buy Yuan-Bond to finance the Chinese oil, until country like Japan and UK or even US flock to buy Yuan bond, I don't actually see this happening in a long time.

China's yuan comes from consumers of oil When you drive in China, don't you use renminbi to buy gasoline? ? ? These renminbi enter into Petro-China, CNOOC, Sinopec, and then these renminbi are paid to Saudi Arabia ，Russia, Venezuela, Nigeria, UAE, Kuwait, and Sudan，etc. These countries then use their renminbi to purchase Chinese products（ Tools, Automobiles, Electronics, etc.) 。Then China's renminbi exported to foreign countries once again returned to the hands of various Chinese companies, and then began a new cycle again.

Their entire oil imports are about 120 billion dollars annually. I see your point about printing Yuan to purchase oil will cause inflation but it is less than 1% of their money supply. They should be able to absorb those inflationary pressures quite easily. Plus they can issue bonds internally until they have mechanism in place to set up a global bond issue. For that they would have to loosen their control of Yuan and make it free floating which is a definite NO for now.

Regarding China financing the US debt, how long do you think it will go on?? As a US citizen myself I am tired of this dependency on China.

Ordinary chinese does not like China gov support US gov by buying US debts either,the dollars should be in the hands of ordinary chinese people(currently,ordinary chinese people and chinese companies are not allowed to hold too much usd on their hands).
1.4 billions chinese can make better decisions themselve than the China Foreign Exchange Reserve Administration。

In short, the Chinese were already poor and not afraid of poverty. The Chinese people hope to open a trade war with the United States to support Chinese companies . The Chinese government led by the Communist Party does not. The Americans should thank China for being ruled by the Communist Party coz they are stupid rulers.

 

[Dai Toruko]

The jews control the macro level... the laws, regulations, big business, etc while the chinese control the micro level.. factories, back stabbing friends/coworkers, stealing intellectual property, stealing jobs, etc.

So between these two, they are slowly taking over not just the US but the whole world.

 

[Adam WANG SHANGHAI MEGA]

The jews control the macro level... the laws, regulations, big business, etc while the chinese control the micro level.. factories, back stabbing friends/coworkers, stealing intellectual property, stealing jobs, etc.

So between these two, they are slowly taking over not just the US but the whole world.

Are you talking about the Turks stealing Chinese military technology?
Such as HQ-9 Air defense missile core data (Turkey promised to sign the contract, and then, after obtaining the core data, tore up the contract, and then shot down the Russian fighter plane and brazenly want to purchas HQ-9 Air defense missile system again from China and rejected by China),China High speed railway system and Weishi Rockets systems ,etc.and call them fully developped by Turks themselves？