China will let its commercial banks invest in Japanese stocks and funds, signaling that the government is widening the scope of its overseas investment program.
The move is intended to let more Chinese investors participate in global capital markets to further risk, the China Banking Regulatory Commission said in a statement posted on its Website yesterday.
China will "soon" sign similar agreements with the US and German governments under the so-called qualified domestic institutional investor, or QDII, program, the industry watchdog said last month, Bloomberg News reported.
The Chinese government is expanding investment destinations for its QDII program after four funds posted combined losses of 11.8 billion yuan (US$1.7 billion) in the fourth quarter of 2007. In addition to Japan, Chinese banks are able to invest in Hong Kong, the UK and Singapore on behalf of clients.
The release didn't say when QDII funds can start investing in Japan.
Meanwhile, China Investment Corp, which manages the nation's US$200 billion sovereign wealth fund, denied an NHK Television report that it will invest more than one-sixth of its assets earmarked for overseas investment in Japan.
"The report is without basis," said Wang Xiaoya, the company's Beijing-based press official.
NHK cited unidentified people, who learned about the plan from a visit of fund officials to Japan earlier this month.
Beijing-based CIC, Asia's largest sovereign fund, will have up to US$70 billion to invest overseas.