China has eased restrictions on its commercial banks by allowing them to
invest in overseas stock markets for the first time, according to the China
Banking Regulatory Commission.
Commercial banks can now invest up to 50 percent of their funds in the
qualified domestic institutional investors program to buy overseas stocks, the
commission said in a statement on its website on Friday.
The statement said no more than five percent of the net assets of each fund
product is allowed to be invested in one stock.
It added each investor will need at least 300,000 yuan, or the equivalent in
foreign currency, to buy such money management products.
Analysts said the measure would help to rein in the growth of China's foreign
exchange reserves that already total 1.2 trillion U.S. dollars, which have
resulted in excessive liquidity and the flooding of the domestic stock markets.
According to the statement, the commercial banks are still banned from
investing in commodity derivatives, hedge funds and securities rated below a BBB
investment grade rating.
In China, individuals are banned from investing directly in overseas