Shanghai Stock Exchange, the China Financial Futures Exchange and Deutsche Börse have agreed to embark on a joint venture.

The new company will be named China Europe International Exchange and will commence market operations in Q4 2015 and will be incorporated in Germany. Deutsche Börse and the Shanghai Stock Exchange will each own 40% and China Financial Futures Exchange the remaining 20% of the venture. 

“In the context of China’s capital market liberalisation, the offshore trading platform set up by the three exchanges will further promote the two-way opening up of China’s capital market, enrich the product line of the offshore RMB market and accelerate the pace of Renminbi internationalisation," said Dr Gui Minjie, chairman of Shanghai Stock Exchange, who also described the venture as "a major step forward" in the cooperation between the three exchanges.

The three institutions have agreed on a strategic cooperation to launch a joint venture with an objective to develop and market financial instruments based on Chinese underlyings to international investors outside mainland China. 

The initial scope of product development will cover cash market products for market launch. Products offered as part of the joint venture will be offered in RMB to support the internationalisation of the Chinese currency.

“The establishment of the RMB asset trading platform in Frankfurt by Shanghai Stock Exchange, China Financial Futures Exchange and Deutsche Börse will help pave the way for further opening up of China’s capital market and contribute to RMB internationalisation,” added Zhang Shenfeng, Chairman of China Financial Futures Exchange.

Along with China’s integration in global economic activities, the cross-border use of RMB is increasing rapidly, and RMB internationalisation has become an important strategy in the process of the opening-up of China’s economy and financial industry. 

“China has developed into an important player for the global economy. The joint venture is meant to support this role further by promoting the internationalisation of the RMB with capital market products,” said Andreas Preuss, Deputy CEO of Deutsche Börse AG in charge of cash and derivatives markets.