CHINA WILL launch its first crude oil futures contract at the Shanghai International Energy Exchange on March 26, China Securities Regulatory Commission announced on Friday. Beijing Youth Daily commented on Monday:

The Shanghai International Energy Exchange in the city's free trade zone will allow foreign investors to trade the new oil futures contracts, a first for China's commodities markets.

The move marks the end of years-long preparation by China to introduce the first crude oil futures benchmark in Asia, and aims to ensure the world's largest oil importer－China imports 67 percent of the oil it consumes－its overdue say in the pricing of crude oil.

The yuan-denominated contracts, which will be open to investors from both home and abroad, will give the Shanghai International Energy Exchange a share of the global oil futures trading that is measured in trillions of dollars, and give China more clout in pricing crude, in Asia at least.

Currently, about 97 percent of global oil trades are priced off two crude derivatives: the United States' West Texas Intermediate and the United Kingdom's London Brent. If the trading in Shanghai goes well, China looks set to put an end to the West's pricing monopoly.

That the crude futures are priced in renminbi will reduce China's dependence on the dollar in crude trades, and thereby effectively lower the exchange rate risks related to the dollar.

Crude oil futures trading, which has the function of hedging and profit arbitrage, can also help China shun risks caused by the big fluctuations of international crude oil prices, and instead seek profits from the ups and downs of the crude oil price, which the West has been doing for a long time.

Hopefully, the long-awaited move can also pave the way for China to have its say in pricing iron ore and natural gas in the international futures market at an early date.