China’s central bank will make it easier for Chinese investors to invest overseas and foreign residents to invest in China, according to comments by bank governor Zhou Xiaochuan.
According to Xinhua, the central bank governor, Zhou Xiaochuan, said on Sunday that China would be accelerating reform and opening up of its capital market by 2015, aiming to make the Chinese yuan freely convertible.
Zhou said that China is prepared to reform the prior approval system governing Chinese residents investing in securities or other financial products overseas, and it will also unveil a series of policies and pilot moves to make it easier for foreign nationals to invest in China’s financial products.
At present, Chinese residents wanting to find a home for their money overseas are unable to do so due to strict regulatory hurdles, leaving a large proportion of China’s population unable to invest their money in anything other than mainland financial institutions or the country’s bloated real estate market.
In recent years the renminbi has become a major force in international currency markets, and is currently the fifth most used payments currency by value according to data from January of this year. Although recent reports from Bloomberg appear to indicate that the yuan’s rise in global trade is losing momentum and adoption outside Asia-Pacific remains limited.
By Dominic Jackson