#AceFinanceReport – CHINA:June.21:China is close to its goal of allowing the yuan to be exchanged for foreign currency without any limits on the amount – a move that will grant greater flexibility to Chinese investment overseas, the deputy head of the central bank says.
"We are not too far away from the yuan capital account full convertibility," said Pan Gongsheng, vice-governor of the People’s Bank of China.
The latest step in the opening of the capital account – which measures inflow and outflow of capital and covers investments such as stocks, bonds and properties – will be the launch of the new qualified domestic institutional investor programme, or QDII2.
"The QDII2 will remove the block on individuals investing overseas," Pan told a wealth forum hosted by the local government in Qingdao , Shandong province yesterday.
These programmes would help internationalise the renminbi and encourage cross-border investment, he added.
The increasing use of the yuan abroad and opening up of the capital account would help China’s wealth management businesses seek more overseas investment opportunities, he said.
"The wealth management market in China is huge. Chinese investors want to invest abroad to diversify their risk."
In the past, indirect financing, mainly bank loans, was the major channel for fundraising, but direct financing such as crowdfunding and internet finance was on the rise, Pan said.