China accelerated the opening of its capital markets by more than doubling the amount foreigners can invest in stocks, bonds and bank deposits as the government shifts its growth model to domestic consumption from exports.
The China Securities Regulatory Commission increased the quotas for qualified foreign institutional investors to $80 billion from $30 billion, according to a statement on its website yesterday. Offshore investors will also be allowed to pump an extra 50 billion yuan ($7.95 billion) of local currency into the country, up from 20 billion yuan.
“Wen is signaling that China can’t afford to let investment slow down too much,” said Shen Jianguang, a Hong Kong-based economist for Mizuho Securities Asia Ltd., who previously worked for the International Monetary Fund and European Central Bank.
The Bloomberg China-US Equity Index of the most-traded Chinese shares in the U.S. fell 0.3 percent yesterday, paring its gain this year to 15 percent. Asian stocks fell today, with the MSCI Asia Pacific Index declining 1.2 percent as of 12:45 p.m. in Tokyo after a report signaled that the U.S. Federal Reserve may refrain from more monetary stimulus. Exchanges in mainland China are closed for a holiday.