China has accelerated approval for foreign investors to tap the domestic capital market as the country tries to attract more long-term overseas investment.
Five Qualified Foreign Institutional Investors got the green light in May to invest in yuan-denominated stocks, data from the China Securities Regulatory Commission showed yesterday. That was an increase from three in April and brought the total number of QFIIs to 225.
Earlier this month, the State Administration of Foreign Exchange said China granted US$1.3 billion worth of investment quotas to QFIIs in May, up from US$137 million in April.
Overseas appetite for China's A shares has also recovered as equity markets improved.
In May, participants in the QFII program opened 22 accounts to trade A shares, second only to 26 accounts - the most so far this year - opened in March, the China Securities Depository and Clearing Corp said.
The average return of funds under the QFII scheme rose 5.34 percent in May while the Shanghai Composite Index gained 5.63 percent, said research firm Lipper & Co, a subsidiary of Thomson Reuters.
In the past decade, the QFII scheme has witnessed a more than 10-fold increase in the number of participants and the size of approved investment quotas.
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