Foreign investment go-ahead

BEIJING:While China once struggled to ensure its citizens kept valuable foreign currency in the country and held a tight rein on its citizens investing money abroad, things are beginning to change.

With foreign currency flowing into China, the government is more open to permitting a little foreign investment by its ordinary citizens and has announced it will allow banks to offer products that invest directly in overseas stocks.

The Qualified Domestic Institutional Investor programme has been widened to include stocks.

Hong Kong's benchmark Hang Seng index ended at a record high following the announcement, as it is expected to boost Chinese companies trading in Hong Kong. Beijing has also introduced a new state foreign exchange investment company and looser controls on individuals and firms' overseas investment.

The central bank is sitting on $1.2 trillion in foreign currency, so the new rules mark a genuine loosening and change in policy.