China FX Derivatives Innovation And Development Study

From July 21, 2005, China launched the reform of the exchange rate system, it is no exaggeration to say that in the past two years,comparing to any period in the past 20 years of reform and opening up, the introduction of measures about China exchange rate system reform is the most intensive, the fastest .And the development of foreign exchange derivatives markets is an inevitable requirement for the reform of exchange rate mechanism, with the advance of reform of the exchange rate mechanism, exchange rate fluctuations increased uncertainty.So how to develop foreign exchange derivatives markets, and subject the exchange rate risk management tools to micro-main in the premise of exchange rate fluctuations, is the objective needs for micro-main, but also the necessity requirements to safeguard national economic security, stability.This paper first analyse the development status of global FX derivatives market , in order to have an overall understanding of the international FX derivatives markets ,and provide reference for the construction of China's FX derivatives markets ;the subsequent describe the promotion of the reform for the develoment of China FX derivatives markets ,and analyse the situation of China's FX derivatives Market under the existing restrictions, then give the proposal for the development of FX derivatives Marke; third part based on the methodology ,make an analysis on the characteristics of a large number derivatives and summarize derivatives innovations ideas: Extended time factor, the change of the basic elements , static and dynamic reproduction and the decomposition of basic elements ;fourth part through case analysis to further interpretate that foreign exchange derivatives innovation is how to effectively meet the needs of micro-main hedge.About the China's FX derivatives creation,it is necessary to consider the costs and benefits of the market building and take into account the derivatives's high-risk .so we should to focus in selecting varieties .For product innovation can learn from foreign experience ,address the specific situation of enterprises launched innovative products which within the framework of their risk tolerance and can meet the need for preserving and increasing the value .