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Banks, Funds Approved to Invest Overseas

2006-04-17 15:06:57 Xinhua
 

　　

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　　The government issued joint regulations Friday that will open up the channels for domestic institutional investors to invest abroad.
　　
　　The government issued joint regulations Friday that will open up the channels for domestic institutional investors to invest abroad and relax controls on domestic firms and individuals buying foreign exchange.
　　
　　The long-awaited moves to allow more outflows of foreign currency, which would decrease upward pressure on the yuan, come before a visit to the United States by President Hu Jintao this week and follow China’s foreign reserves surpassing of Japan’s as the world’s largest.
　　
　　China’s end-February reserves stood at US$853.6 billion, prompting calls to rein in their rapid growth.
　　
　　The central bank said in a statement on its Web site that it would allow banks and fund managers to invest overseas on behalf of individuals and institutions.
　　
　　Banks may convert domestic currency held by individuals or institutions in order to invest in overseas products with fixed returns, the central bank said.
　　
　　Funds will be able to invest individuals’ or institutions’ foreign currency holdings in overseas securities products, including stocks and bonds.
　　
　　The new policy also allows insurance companies to invest in foreign fixed-income assets and money market paper.
　　
　　China has long said that it would let authorized institutional investors channel part of their funds overseas, in what has been referred to as the Qualified Domestic Institutional Investor (QDII) program.
　　
　　The central bank did not say when the investment policies would take effect.
　　
　　A second announcement issued by the State Administration of Foreign Exchange on the central bank’s Web site relaxes the controls on foreign exchange accounts, simplifies approval procedures for foreign exchange payments in the service trade and makes it easier for corporations and individuals to buy foreign currencies.
　　
　　

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