Mainland China has approved the opening of its first futures market in August in a bid to stabilize farm prices, the English-language China Daily reported Sunday.
After a delay of two years, the government gave the go-ahead for a market to trade wheat futures in Chengchou, Henan Province.
The China Daily called the decision "a breakthrough in the country's systematic reforms."
Three other futures markets are planned: one for corn in Ch'angch'un, Kirin Province, one for rice in Wuhan in Hupei Province, and a third for pork in Szch'uan Province.
Like Honan, the three interior provinces did not benefit from the 1980's reforms that led to strong economic growth in coastal areas.
Government experts were putting the finishing touches to the regulations governing the markets, said the newspaper quoting a spokesman for the State Development and Research Center.
Details of the markets and how they will work will be announced at the end of the month, but foreigners will not be allowed to trade on them at first, the newspaper said.
In February, mainland China signed an agreement with the West's leading futures market, the Chicago Board of Trade, that allowed it to study how such markets work and that helped it to train futures traders.
Futures markets were proposed in early 1988, but their implementation was delayed by an austerity program begun in September 1988 and economic difficulties, the China Daily said.
The markets are aimed at cutting down large fluctuations in the prices of agricultural products brought about by price deregulation in the 1980's.
The price fluctuations have caused heavy losses to some peasants and affected prices in cities, forcing the government to increase subsidies.
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