2 months ago
8894
China says it will now let foreigners invest directly in domestic nickel and lithium futures. The change is part of Beijing’s push to gain more power in global commodities markets.
Right now, prices for these raw materials are still decided in places like London, New York, and Singapore. China buys more than anyone else but doesn’t get to call the shots. That’s the part it’s trying to fix.
The China Securities Regulatory Commission said 14 futures and options products will be opened to overseas capital. It didn’t say when the changes will start but told local exchanges to begin preparing.
Nickel contracts are traded on the Shanghai Futures Exchange, while lithium carbonate is handled by the Guangzhou Futures Exchange. Both are heavily traded and play a major role in powering electric vehicles and the broader energy industry.
Shanghai exchange prepares for global access push
The Shanghai exchange already laid out an internationalization plan back in May. The idea was to let foreign investors post collateral in foreign currency when making yuan-denominated trades.
In other words, you won’t need to convert your dollars or euros into yuan before trading. That’s been one of the main problems for years. People don’t want the added currency risk.
“Allowing foreign funds into futures will help China price these metals better,” the SHFE said in its own statement. It also said this could help improve risk management in metals and strengthen nickel price discovery. But here’s the thing folks; this isn’t the first time China has tried something like this.
In 2018, foreigners got access to iron ore futures on the Dalian Commodity Exchange. That worked okay. But other moves? Not so much. Since 2018, yuan-denominated crude oil contracts have been open to global traders on the Shanghai International Energy Exchange, and copper was added in 2020. But neither made a dent in the dominance of international exchanges. Most traders still stick to New York or London.
Even now, Beijing is pushing hard to get the yuan more widely used in global markets. This futures opening move lines up with that. The more people trade in yuan, the more appealing it becomes as a currency. Still, there’s a long way to go.
Weak investment data exposes deeper financial cracks
Meanwhile, China’s foreign investment numbers for 2025 stayed stable. That’s after a slow spring caused by fears around the first wave of new U.S. tariffs. Most of the money went to Brazil, with transportation as the leading sector, just slightly ahead of metals.
For construction, Saudi Arabia took the top spot. The energy industry again led the way for construction deals.
The Ministry of Commerce said overall outbound investment was close to a record. But unlike 2016, when China’s global spending caused major political waves, the 2025 version landed quietly.
Inside the U.S., Chinese investment has shrunk to almost nothing. Other issues now matter more, especially America’s dependency on China for pharmaceuticals, and the loss of advanced tech in those supply chains. The Trump administration doesn’t seem bothered by it.
Back home, China’s fixed-asset investment (FAI) dropped 3.8% in 2025. That’s 48.52 trillion yuan, or about $6.8 trillion. It was the first yearly drop in decades. Blame the crashing property market and stricter limits on how much local governments can borrow. That’s hitting one of China’s main growth tools.
The Fitch ratings agency said this drop caused credit risks across sectors, even for the government itself. In April, Fitch downgraded China’s sovereign rating from “A+” to “A,” citing rising public debt and weakening financial health.
It also warned that growth in several areas is “deteriorating.” Weak demand, falling prices, and a real estate collapse are dragging things down.
By the final quarter of 2025, China’s economy had slowed to 4.5% growth, its weakest pace in three years.
Claim your free seat in an exclusive crypto trading community - limited to 1,000 members.
English (US)