China may be the world's largest consumer of commodities but has little say over commodities prices since exchanges where they are traded are in the West. That may be changing.
The Hong Kong Mercantile Exchange (HKMEx) is open for business and aims to position China to compete with London, New York, and Chicago.
"Global demand for core commodities has in recent years been driven by Asia," says Barry Cheung, chairman of HKMEx, according to the Christian Science Monitor. "Our new platform will offer Asia a bigger say in setting global commodity prices."
Commodities like oil, copper and wheat are denominated in U.S. dollars, which gives the U.S. an advantage in setting prices, but more and more trading in Asia could cut into the U.S. influence.
"I think, given the rise and people’s awareness of commodities and natural resources in this part of the world, that it will be an exchange for people in the region to use," says Andrew Ferguson, CEO of APAC Resources, a Hong Kong-listed natural resources investment and commodities trading company.
"I suspect the exchange will be nothing short of a success on the basis of the fact that it’s going to capture a lot of the business which goes on in this corner of the world."
China's economy has been booming over the past few years, and it needs all those commodities to grow.
Some economists, including New York University economist Nouriel Roubini, says China is due for a breather, which could get rough.
"There is a meaningful probability of a hard landing in China after 2013," Roubini said recently, according to Reuters.
© 2017 Newsmax Finance. All rights reserved.