China's central bank calls for raising foreign investment quota

China should increase qualification and quota for Qualified Foreign Institutional Investor (QFII) and Qualified Domestic Institutional Investor's (QDII) investors to help them with their activities, Zhou Xiaochuan, governor of the People's Bank of China, said. Administrative approval procedures for QFII and QDII qualification and quota shall be eliminated "when conditions are ripe," Xinhua News Agency quoted Zhou as saying on Tuesday. He made the remarks while attending the third Sino-French Financial Forum in Beijing. "Reforms to further liberalize interest rates, deposit rates in particular, are being considered. China will relax market access to allow private economy to set up small and medium sized financial institutions on the condition of enhanced administrative supervision," he added. In 2002, China launched the QFII scheme to allow licensed foreign investors to use offshore yuan for investing in the country's capital market. QFII operations over the past 10 years have played an active role in facilitating the opening-up of China's capital market and improving China's institutional framework and investment concept. Kuwait Investment Authority (KIA) received QFII license in 2011 as the second qualified Middle Eastern fund after Abu Dhabi Investment Authority. KIA opened its Beijing representative office that year, which has been serving as a platform for exploring lucrative investment opportunities in China and the Far East. Meanwhile, the QDII scheme was launched in 2006 to allow domestic funds to be invested abroad.