Top Biz News

More QDII banks set for approval

By Zhang Jin (China Daily)
Updated: 2006-07-04 08:31

In April, the People's Bank of China and the State Administration of Foreign Exchange jointly announced that the mainland's banks could invest, on behalf of their clients, in financial markets overseas. That signals an important deregulation of the mainland's financial regime.

Hong Kong is expected to benefit from the move, as the city has long been regarded as a springboard for mainland investors to go global.

"I think Hong Kong would be the first investment destination for the approved QDII players," said Tang Sing-hing, associate director with Hong Kong-based Tung Tai Securities, citing the fact that they all trade or will trade their shares in Hong Kong.

"They are familiar with Hong Kong," he said.

Local bankers also want the mainland to further loosen the regulation to allow them to invest mainlanders' money in overseas securities markets. At present, QDIIs can only invest in fixed-income products and their derivatives.

"We all know the opening will be gradual," said an anonymous manager from a local bank. "But we just wish the deregulation would be quicker, to let smaller banks to join in a bigger spectrum."

Also on the same occasion, Liu said Hong Kong lenders have been playing actively on the mainland.

By the end of April, Hong Kong banks' mainland assets amounted to US$26.3 billion, an increase of more than 30 per cent year-on-year, Liu said. They account for 30 per cent of overseas banks' total assets on the mainland.

By the end of May, 14 Hong Kong banks had set up 50 branches, 28 sub-branches and 23 representative offices on the mainland.