China has made some new moves to make it easier for foreign investors to invest in the country. The nation’s primary currency regulator, the State Administration of Foreign Exchange, announced changes to China’s Qualified Foreign Institutional Investors and Renminbi Qualified Foreign Institutional Investors programs, which regulate how overseas investors can purchase Chinese assets. In a statement, the regulator said of the changes, “The convenience of foreign investors to participate in the domestic financial market will be greatly improved again, and China’s bond and stock market will be better and more widely accepted by the international market.”
Under the changes, global funds no longer need approvals to purchase quotas to buy Chinese stocks and bonds. Now, foreigners need only to register before buying Chinese securities. The regulator also removed a $300 billion cap on foreign investment into its financial markets. According to Bloomberg, roughly two-thirds of the cap remained unused as of August 30.
The move is just the latest attempt by the Chinese to attract more foreign investors to its financial system. The country has been slowly loosening the reins since 2000, when the nation was negotiating its entry in to the World Trade Organization. One of the biggest moves was to allow foreign banks and insurers to take controlling stakes in their local ventures. UBS Group AG, JPMorgan Chase & Co., and Nomura Holdings Inc. have all won approval for their bids while Goldman Sachs Group Inc. and DBS Group Holdings Ltd. have applications pending. Last year, China removed lock-in periods and allowed investors who used the quotas to repatriate their money at any time. Previously, there were limits on the amount foreigners could take out of the country at one time. According to a lawyer who asked not to be identified discussing client matters, a few years ago, one major fund waited almost four months to get approval to repatriate investment proceeds to its headquarters.