China scuttles plans to set benchmark

China has suspended plans to launch its own crude futures contract that would have been listed on the Shanghai International Exchange (INE), sources revealed on Friday.

This most recent development is the latest in a series of delays that began five years ago. The plan was deemed viable until Q4 2016, when the INE quietly suspended the development for the foreseeable future, people familiar with the matter told Reuters.

Had the plan moved forward, China would have created a crude benchmark capable of competing with Western standards such as the US’ West Texas Intermediate and the UK’s Brent.

The development of a Chinese benchmark would have solidly cemented the country’s goal of becoming a global energy hub. However, China’s restrictions on capital outflows, left international investors uneasy regarding future Yuan exchanges.

Other variables affecting the development of the benchmark included questions of reliability related to the Chinese governments control over the country’s hydrocarbons market.