Ceiling hike for foreign investors 'very soon'

Cumulative investment quota of $1 billion for QFII program likely to see further revisions

China will raise the ceiling of cumulative investment in the domestic securities market for a single qualified foreign institutional investor, an official of the country's foreign exchange regulator said on Thursday.

Guo Song, head of the capital account management department at the State Administration of Foreign Exchange, said that the regulator had been planning reforms for the Qualified Foreign Institutional Investor and the Renminbi Qualified Foreign Institutional Investor programs.

"I expect that we'll see an increase in the existing $1 billion ceiling for a single QFII in a day or two. We are also thinking about how to make it more convenient for capital to flow into and out of China," Guo said.

The SAFE loosened its control on the QFII quota in December 2012, saying that sovereign wealth funds, central banks and monetary authorities could exceed the $1 billion quota limit.

Central bank Governor Zhou Xiaochuan said at the China Development Forum on Sunday that the country will make great efforts to achieve the yuan's capital account convertibility this year.

Zhou said China will launch more reform policies and pilot programs, making it more convenient for domestic investors to purchase securities and other financial products overseas, and increase the flexibility for foreign investors to invest in China's financial markets.

Policymakers will promote further opening of the capital markets. On the one hand, domestic investors will find it more convenient to invest in overseas capital market. On the other hand, bond issuers will have more freedom to choose where to issue bonds and in which currency, he said.

China will also have a new round of revision for its regulations on the foreign exchange system to meet the demands for achieving capital account convertibility and the full convertibility of the renminbi.

Currently, around 85 percent of the 40 subcategories under the capital account have become partially or fully convertible, according to the SAFE.