FOREIGN investors will be allowed to transfer either foreign currency or yuan funds into China to trade in the country’s commodity futures market, the foreign exchange regulator said Friday.

    The imminent opening of its booming commodity futures market is a major reform supporting China’s efforts to increase its sway on global commodity pricing. China is the top global consumer of many raw materials.

    The securities and futures watchdog announced in June that China would allow foreign investors to trade in some commodities futures for the first time and the forex regulator’s announcement Friday made related foreign exchange regulations ready for foreigners to trade futures.

    Foreign players, especially institutional investors, will also help develop the sector and usher in international practices, analysts have said.

    At present, foreign companies have very limited access to China’s commodities markets. Companies are only allowed to trade via brokers after setting up a locally registered non-financial unit, which requires a hefty amount of registered capital.

    As of Saturday, foreign commodity futures trading or brokerage firms can open special accounts in designated China-based banks and funds transferred for such trading must not be used for other purposes, according to rules issued by the State Administration of Foreign Exchange on Friday.

    These funds will not be included when measuring short-term foreign debt at banks.

    (SD-Agencies)