China to restart T-bond futures trading

The government is planning to resume treasure bond futures trading in order to speed up the marketization of interest rates, the Shanghai Securities Journal reported Wednesday.

After 18 years of suspension, an initial plan for trading T-bond futures has been approved by the State Council, or China's cabinet, although a listing date has not been specified, the paper said.

The launch of T-bond futures will strengthen financial institutions' ability to guard against interest rate risks, as well as expand bond inventories in China, according to the report.

China launched T-bond futures trading in 1992 but suspended it in 1995 due to illegal and excessive speculation related to the trading of three-year-term T-bond futures coded "327."

Experts said the time is ripe for the resumption of T-bond futures trading, as the scale of China's T-bonds has grown steadily and securities regulations have improved significantly.