China will further open its financial sector in "an active and
safe" way, the country's central bank promised on Friday.
"China will gradually broaden the scope for the participation of
foreign capital in the domestic financial market," said the
People's Bank of China in a report.
"We will strengthen the connections between China's financial
market and international counterparts by attracting more foreign
capital in Renminbi-denominated financial products," the report
said.
Currently only qualified foreign institutional investors (QFIIs)
can invest in the yuan-denominated A-share stock market.
The central bank said it would lower the threshold for approving
QFIIs and increase their investment quotas, and further encourage
foreign institutions to issue yuan-denominated bonds and securities
in the country.
By March 4, a total of US$9.995 billion of investment quotas had
been granted to 49 QFIIs.
Meanwhile, channels will also be expanded to allow Chinese
investment in foreign financial markets.
The bank said it would ease restrictions on enterprises and
individuals possessing and using foreign currencies and increase
the number of qualified domestic institutional investors (QDIIs)
and the value of their investment quotas.
"We will make use of the financial market to achieve balanced
international payments," said the bank.
Last year, the State Administration of Foreign Exchange (SAFE)
raised the annual quota for individuals buying foreign currency
from US$20,000 to US$50,000.
"China will strive for a more efficient and vigorous financial
market that can better serve international needs," the bank
said.
The country will adjust its financial market rules so they are
accepted around the world, encourage innovation and promote more
flexible, diversified ways of trading, according to the bank.
China fully opened its financial market to foreign capital on
December 11 last year, ending a five-year transitional period after
entering the World Trade Organization (WTO).
(Xinhua News Agency March 17, 2006)