BEIJING -- China's Banking Regulatory Commission has approved the China Merchants Bank to buy overseas financial investment products on behalf of the Chinese customers.

The move has brought the number of China's Qualified Domestic Institutional Investors (QDII) to eight, the China Securities Journal reported on Wednesday.

The other seven are the Bank of China, the Industrial and Commercial Bank, China Construction Bank, the Bank of Communications, and three foreign-financed banks: the Hong Kong and Shanghai Banking Corporation, Citibank and the Bank of East Asia.

The QDII scheme allows domestic institutions and residents to invest in overseas financial products via the mainland commercial banks, and allows insurance institutions to invest some of their assets in overseas fixed-income and money-market products.

Since July 21, when the State Administration of Foreign Exchange granted QDII quotas to commercial banks, a total of 8.3 billion U.S. dollars has been invested.

With speculation that the yuan could appreciate and China breaking trade surplus records, foreign capital is rushing into the country. To balance its international payments, the authorities are expanding the QDII scheme.

However, analysts have pointed out that the authorized QDII quotas were too small and would not change the situation in the short term as China's savings, trade surplus and foreign exchange reserves continued to rise. Easing controls on capital outflow would help ease pressure to revalue the Renminbi, the newspaper said.