Business Activities News
- China eases curbs on banks offshore investments
Date: 14-May-2007 Sources: (Shenzhen Daily)
China is to ease curbs on offshore investments in a bid to reduce the rising tide of liquidity in the financial system, state press reported Saturday.
The new rules widen the scope of a government program for banks and other institutional investors to tap more than four trillion dollars in national and corporate savings, the Shanghai Securities News reported.
The move by the China Banking Regulatory Commission is also aimed at easing appreciation pressure on its currency and the pace of growth in foreign reserves that, at 1.2 trillion dollars, are already the world's largest.
According to the commission, individual bank customers will be allowed to invest a minimum of 300,000 yuan (38,900 U.S. dollars) in offshore stocks.
Stocks can account for up to 50 percent of the net value of an offshore investment product offered by a bank, with the net value of a single stock capped at five percent, the regulator said.
Investors have so far shunned the government investment scheme, launched in June last year, as regulations have been seen as too stringent.
Banks were only allowed to invest fixed-income products.
Strong appreciation in the yuan and China's booming stock markets have further undermined the program.
Of the 18.5 billion dollars worth of quotas allocated by March this year, only about five percent had been used.
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