China to 'simplify' procedures for foreign investors

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

China has said it will "simplify" procedures for foreign direct investments, the latest step in its attempts to attract more investors.

Under the new rules, investors will not require approval for opening foreign currency accounts or for re-investing foreign exchange earnings.

China has been trying to attract foreign investors in an attempt to spur a fresh wave of economic growth.

China's growth has been slowing and hit a three-year low in the third quarter.

The slowdown has hurt the flow of foreign direct investment (FDI) into the country.

Earlier this week, China reported that FDI fell 0.24% in October, from a year earlier. That was the 11th month to record a drop in the past year.

The new regulations will be implemented from 17 December, according to the state news agency Xinhua.

More attractive?

Prompted by the slowdown in its economic growth and the fall in foreign investment, China has taken various steps to try to attract investors.

Earlier this month, Beijing said that it would raise the cap on the total amount of money foreign investors can bring into the country.

It said it will raise the quota for its Qualified Foreign Institutional Investor (QFII) programme - one of the main channels used by foreign firms to invest in Chinese financial markets - once its current limit of $80bn (£50bn) is reached.

It was the second time this year that it had made such a move.

Earlier this year, it relaxed the entry rules for foreign investors, making it easier for more firms to make a foray into China.

It also opened up more investment options for QFIIs, by allowing them to participate in China's tightly-controlled interbank bond market.

Furthermore, it has raised the limit on the combined stake that foreign investors can hold in a listed Chinese company to 30% from 20%.

The securities regulator has also said that it is considering offering tax breaks to QFIIs.

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