A view of the Guangdong-Hong Kong-Macao Greater Bay Area special section at the China International Financial Expo in Guangzhou, South China's Guangdong Province on Sunday. Photo: IC

China's financial authorities on Thursday unveiled plans to set up a futures exchange in Guangzhou, South China's Guangdong Province to ramp up financial support for the Guangdong-Hong Kong-Macao Greater Bay Area.

Also, the guidelines are envisioned to give full play to the carbon emissions exchange in Guangzhou and establish an environmental equity trading and financial services platform for the Greater Bay Area. Carbon emissions trading denominated in foreign currencies will start trials.

Qualified overseas institutional and individual investors will be allowed to trade carbon emissions in the Greater Bay Area in the yuan or foreign currencies, said the guidelines.

The announcement confirmed a long-anticipated move to add Guangzhou into the nation's futures network, shoring up the financial strength of the Greater Bay Area, one of the pivotal growth engines for the economy, analysts said.

The exchange is likely to gain regulatory approval by the end of 2019, becoming the first futures bourse to be green-lit by the country's securities regulator in 26 years, the Shanghai Financial News reported in October 2019, citing He Xiaojun, head of the local financial supervision administration in Guangdong. 

Carbon emissions options and futures were expected to be among the exchange's initial offerings.  

Guangzhou housed multiple futures exchanges before 1998 when a national clampdown closed all of them, according to the Shanghai Financial News report. Guangdong initiated a push for a futures exchange to be instituted in its capital city in 2006.  

There are now four futures exchanges in the Chinese mainland - two in Shanghai, one in Zhengzhou, Central China's Henan Province, and one in Dalian, Northeast China's Liaoning Province. 

The nation will have five futures exchanges after the creation of the Guangzhou bourse. By comparison, the US houses three major futures exchanges - two in Chicago and one in New York. The UK has two major ones, both in London.