Senior Chinese lawmaker Cheng Siwei

Cheng was invited to be a guest professor at Fudan University and delivered a speech at the renowned university today.

Earlier reports said the company will be modeled on Temasek, Singapore's state-owned investment company, to manage part of China's US$1 trillion-plus in forex reserves.

The forex firm will issue yuan bonds worth US$200 billion to US$250 billion in the first batch after being established within the year, Shanghai Securities News said.

It will conduct long-term strategic investment in energy firms, such as China National Offshore Oil Corp, at first.

Chen said Shanghai has more advantages to be developed into a financial center than other cities in China.

The city has a mature securities market, futures market and the central bank has set up a branch in the city, which makes Shanghai more suitable as the financial center of China.

Cheng said investments in futures can preserve values but it also creates opportunities for speculation.

The development of futures will play an important role in preventing risks, Cheng said.

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China should try to gain rights in setting global commodities prices by developing its commodities futures, Cheng said.

Asset quality of China's four biggest commercial banks has improved a lot, which attracts a lot of investors. However, the banks still need to enhance their management, Cheng said.

"Domestic banks need at least 10 years to overtake Hong Kong banks in terms of management and business scope," Cheng said. 

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