China scraps foreign invesment cap in stocks, bonds

| | Beijing
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China scraps foreign invesment cap in stocks, bonds

Thursday, 12 September 2019 | AFP | Beijing

China on Tuesday removed limits on foreign institutions wanting to invest in its stocks and bond markets, as it seeks to attract overseas investment amid a slowing economy and a trade spat with the United States.

Foreign individuals are barred from investing directly in China’s markets, but the country allows certain institutions to buy shares under the so-called Qualified Foreign Institutional Investor (QFII) scheme.

The State Administration of Foreign Exchange (SAFE) said Tuesday it has removed the overall ceiling of $300 billion on total asset purchases under this scheme, offering unfettered access to the world’s second-largest capital market.

A cap on a yuan-denominated sister scheme — the Renminbi Qualified Foreign Institutional Investor (RQFII) programme, which allowed overseas institutions to invest in Chinese securities using the offshore yuan — was also removed on Tuesday.

“Foreign institutional investors with the relevant qualifications can remit funds to carry out investment in securities in compliance with regulations, greatly enhancing the convenience for foreign investors participating in the onshore financial market,” the regulator said in a statement.

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