Foreign exchange regulator loosens restrictions on foreign investment

China’s State Administration of Foreign Exchange announced on Thursday that foreign investors registered with its Qualified Foreign Institutional Investor (QFII) program will no longer be subject to individual quotas and will instead be allowed to invest around 20% of total assets (or client assets under management) into China without any special permission, The Financial Times reported. Analysts said that while the timing of Thursday’s move was likely linked to concerns over capital outflows – China’s foreign exchange reserves have fallen by US$664 billion in the past 18 months – the policy loosening was also part of a longer-term trend towards freer cross-border capital flows and currency conversion.