Tuesday, May 17, 2005

China to allow foreign investors into primary stocks and debt markets

by Brian Turner

A report in the China Securities Journal indicates that the nation will raise the amount of money foreign investors will be permitted to invest in China’s primary markets. Already this year, China has given its permission for 26 foreign entities invest a total of $4 billion in over 1,300 Chinese companies, treasuries, and corporate bonds. That amount is expected to rise to a total of $10 billion under a qualified foreign institutional investor (QFII) program.

The QFII was initiated in 2003 but had Beijing slowed approvals in the program. Approvals are expected to speed up now that China’s main equities index has fallen 13.6 percent since the beginning of the year, bringing the markets to a six-year low. Coming on the heels of a 15 percent fall last year, Beijing seems certain to value attracting more foreign investment.

An official of the China Securities Regulatory Commission (CSRC) was quoted as saying that it was “only logical” that foreign investors will be take a larger role in China’s economy as it grows.

 

 

 

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