Dealers bet on onshore commodities units in China
Western dealers have set up onshore units in China as part of an effort to regain hedging business with Chinese corporates following large losses from derivatives contracts during 2008. How are these efforts working out? Kathy Wang reports
Chinese companies recorded 11.4 billion renminbi ($1.4 billion) of mark-to-market losses from over-the-counter derivatives contacts with a notional value of 125 billion renminbi during 2008, according to the State-owned Assets Supervision and Administration Commission (Sasac). The revelation of losses sparked a backlash against foreign financial institutions that had sold these contracts and has restricted derivatives activity with Chinese entities, ever since.
What stood out about the Sasac
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