China eyes more foreign investment as it raises quotas

Chinese yuan notes
Image caption China is keen to boost foreign investment in its financial markets

China has said it will give foreign investors more access to its financial markets as it tries to spur a fresh wave of economic growth.

It said it will raise the Qualified Foreign Institutional Investor (QFII) quota once the current limit of $80bn (£50bn) is reached.

It is the second time this year that China has increased the quota.

It will also raise the limit for investors seeking to put yuan funds, raised overseas, in China's markets.

Guo Shuqing, the head of the China Securities Regulatory Commission, said that the regulator had already reached an agreement with the Chinese central bank and the State Administration of Foreign Exchange to raise the QFII limit.

"If the $80bn gets used up, we will definitely expand it," Mr Guo was quoted as saying by Reuters news agency.

In a further attempt to attract more foreign investment into the markets, Mr Gou said the regulator was also considering raising the investment cap on individual QFIIs.

"We'll look at individual institutions on a differentiated basis.

"For very big institutional investors - in the past we allowed them to invest at most $1bn. Now we'll expand the limit to $2bn, $3bn, even $5bn," he said.

He added that China was also considering offering tax breaks to QFIIs.

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