May 21, 2012 / 2:16 AM / in 7 years

China ponders new investment channel for foreign pension funds-paper

SHANGHAI, May 21 (Reuters) - China’s stock regulator said it may give pension funds from Hong Kong, Taiwan and Singapore an additional channel for investing in China’s capital markets other than the established Qualified Foreign Institutional Investors (QFII) scheme, the official China Securities Journal reported on Monday.

The China Securities Regulatory Commission (CSRC)was quoted saying in the report: “As for pension organisations from Hong Kong, Taiwan and Singapore, if their quota demand is really big, the CSRC will consider to use other ways than the QFII to give them special licenses and quotas.”

China has been encouraging long-term investors such as foreign insurers and pension funds to invest directly in the country’s stocks and bonds, as part of its broader reforms of the country’s financial sector.

On Sunday, the State Administration of Foreign Exchange (SAFE) said China would accelerate approvals of investment quotas for medium- and long-term overseas investment funds under QFII scheme.

In a recent report the CSRC said QFIIs had made a combined net profit of 151.6 billion yuan ($24 billion) in their investment in China’s yuan denominated A-share market.

The QFII scheme was launched in 2003 to give foreign institutions a channel to invest in China’s stock and bond markets under a quota system.

Regulators have raised the overall QFII quota to $80 billion from the previous $30 billion as part of policy support the China’s stock market. ($1=6.33 Yuan) (Reporting by Lu Jianxin and Kazunori Takada; Editing by Eric Meijer)

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