China raises foreign fund limits to one bln dlrs

SHANGHAI (AFP) - China's foreign exchange regulator said it had raised the limits on securities investment by foreign institutions to one billion dollars from 800 million dollars starting Monday.

The rules, which govern the Qualified Foreign Institutional Investor, or QFII programme, were published on the State Administration of Foreign Exchange website over the weekend.

The QFII programme, launched in 2003, is the main way for foreign institutions to invest in yuan-denominated equities in China, where the authorities keep strict control over capital flows.

The new rules are aimed at "attracting mid- and long-term investments," the foreign exchange watchdog said.

The agency also slashed the lockup period on investments made by qualified foreign pension funds, insurance companies, and mutual funds down to three months from one year previously.

China agreed in talks with the United States in late 2007 to raise the QFII ceiling for the combined quotas to 30 billion dollars from 10 billion dollars, but total approvals so far were about half that amount at 15 billion.