Top government officials, however, suggested the change should be carried out gradually.

The national seminar, organized by the China Securities Regulatory Commission, marked the first anniversary of the issuance of the first provisional regulations on futures trading.

Supporters of the loosening of the rules said it will benefit the domestic futures brokers and exchanges, and is necessary to keep pace with the national economic development.

"Gradually, China is deregulating the trading of commodities. Without the government's protection, producers, like farmers, need the futures market to ward off risks from volatile prices," said Zhu Yuchen, general manager of Dalian Commodity Exchange.

But most of China's commodity producers are not familiar with the country's futures market, which is too small and on which only seven commodities are traded, analysts said.

China's futures exchanges, established in 1990, flourished until 1995, when the government intervened by suspending the trading of several commodities and closed or restructured the exchanges to check rampant speculation.

As a result of the introduction of the regulations, the potential big-time dealers, including state enterprises, banks, insurance firms and mutual funds, are barred from trading on the futures market. Futures brokers also are not allowed to trade on their own account.

Last year, China's futures trading volume declined for a fourth straight year, as the government still is wresting control over the exchanges to curb speculation, analysts said.

All futures brokers entirely are relying on brokerage fees, and most of them posted losses in the first half of this year. "China's futures market will go through a crucial period in the next 10 months," said researcher Wu Shuo with the State Internal Trade Bureau.

However, Wang Jianxi, the regulatory commission's deputy secretary-general, said the futures market's development should be carried out step by step.

"Currently, domestic investors are not strong enough to cope with big risks, and the government still controls the distribution of many commodities," Wang said. "Therefore, the gradual, but steady, development is most suitable for the industry."

At the seminar, the regulatory commission agreed to set up a national futures trading association by the end of this year.

(www.eastday.com)