China relaxes foreign investment rules

Private equity firms have gained greater freedom to invest in the Chinese public markets, according to a statement from the China Securities Regulatory Commission (CSRC).

Under the “asset management firm” category, part of China's Qualified Foreign Institutional Investor (QFII) programme, GPs can now take up to a 30 percent stake in Chinese listed companies. Foreign GPs can now also buy the nation’s interbank bonds and debt issuances of small and mid-size companies.

Previously, brokerages, banks, mutual funds and insurers were the only participants in the QFII.  

Chinese regulators have also relaxed the programme’s entry requirements. Foreign firms with over $500 million in assets under management and a minimum two-year operational history can now participate. Previously a QFII license required five years of operations and $5 billion in assets under management.

The CSRC will expedite the QFII approval process to attract more foreign capital into the Chinese market, the statement said.