China introduced stock index futures mainly to provide institutional investors with a hedging tool.

China stock market has developed for 20 years. However, due to the small scale of most stocks, it is not conducive to the entry and exit of large institutions. In this way, once the institution buys, the stock price will be pushed up, once it sells, the stock price will be depressed and the stock market will fluctuate violently.

After the introduction of stock index futures, institutions can hedge the risk of stock price decline by short selling stock index futures, instead of passively selling stocks, which will lead to further stock price decline.

With the listing of more large-cap stocks and the introduction of stock index futures, margin financing and securities lending, the A-share market has become more and more attractive to large institutions at home and abroad, making some preparations for A-shares to become an important world market in the future.