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Gov't Authorizes Citibank to Offer QDII Services
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Citibank has been authorized by the China Banking Regulatory Commission (CBRC) to provide QDII (Qualified Domestic Institutional Investors) services to Chinese citizens, the Xinhua-run Shanghai Securities News reported Thursday.

 

It is the seventh bank and third foreign-financed bank in China to be granted the right to offer QDII services, the newspaper said.

 

The QDII scheme allows domestic institutions and residents to invest money in overseas financial products via mainland commercial banks, and allows insurance institutions to invest part of their assets in overseas fixed-income products and money-market products.

 

Since July 21, when the State Administration of Foreign Exchange (SAFE) granted QDII quotas to commercial banks, a total of US$8.3 billion has been invested.

 

With the yuan likely to appreciate and China breaking trade surplus records, foreign capital is rushing into the country.

 

To balance its international payments, the country is speeding up its QDII scheme.

 

The newspaper quoted insiders as saying that although QDII is a useful way of balancing international payments, the authorized QDII quotas are too small and will not change the situation in the short term.

 

Sources with the Citibank said the bank will launch its QDII products in the next few months.

 

The Construction Bank, the Bank of China, the Industrial and Commercial Bank of China, the Bank of Communications, the Hong Kong & Shanghai Banking Corporation and the Bank of East Asia already offer QDII services.

 

As China's savings, trade surplus and foreign exchange reserves continue to rise, relaxing controls on capital outflows will help ease pressures to revalue the renminbi, the newspaper said.

 

(Xinhua News Agency August 11, 2006)

 

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