BIZCHINA / News
Nation to loosen limits on individual financial investment overseas
(Xinhua)
Updated: 2007-03-20 13:54
The Chinese government will loosen limits on individual investment abroad
this year, according to Li Dongrong, vice director of the State
Administration of Foreign Exchange (SAFE).
The government would further broaden channels for investment overseas, Li
said at a meeting on the country's capital investment plan for 2007, the
Shanghai Security Journal reported on Monday.
Analysts said the move indicated a major breakthrough in allowing Chinese
individuals to buy overseas financial assets.
Currently, Chinese individuals can only buy investment products provided
by banks and fund management companies if they want to invest abroad
under a Qualified Domestic Institutional Investor (QDII) scheme.
SAFE granted 15 banks overseas investment quotas totaling US$13.4 billion
in 2006. Meanwhile, 15 insurance companies were granted overseas
investment quotas of US$5.17 billion and one fund management company was
given a quota of US$500 million.
The meeting also heard that the government would also increase the number
of QDIIs and the value of their investment quotas, but no details of
quotas were available.
China has also eased control on foreign exchange purchases by
individuals. The annual quota for individuals was raised from US$20,000
to US$50,000 on February 1 this year.
At the end of 2006, China recorded a 14-percent annual rise in foreign
debt, of which short-term foreign debt was up 16 percent or so, figures
from the SAFE showed.
Short-term foreign debt makes up as much as 57 percent of total foreign
debt, far higher than the international warning level of 25 percent.
The government is preparing to establish a state forex investment company
to improve management of China's huge foreign exchange reserves and
generate higher returns on the reserves under the preconditions of
security.
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