CHINA will grant U.S. investors a 250 billion yuan (US$38 billion) quota under its Renminbi Qualified Foreign Institutional Investor (RQFII) program to buy Chinese stocks and bonds, a central bank vice governor said yesterday.

    The investment quota, which means U.S. firms would be able to invest yuan funds raised overseas up to that amount to buy Chinese securities, was offered to the United States during the annual economic and strategic talks between the United States and China, according to Yi Gang, deputy governor of the People’s Bank of China.

    Launched in 2011, the RQFII program allows financial institutions to use offshore yuan to buy securities on the Chinese mainland, including stocks, bonds and money market investments.

    The new quota will significantly expand the RQFII program, which stood at 501.77 billion yuan at the end of May.

    The quota is the first granted to the United States under the program. Hong Kong has the largest RQFII quota at 270 billion yuan.

    Chinese regulators have been pushing to expand foreign investors’ access to domestic financial markets to make the markets broader, more sophisticated and attract more capital inflows.

    The central bank said in February it would allow all kinds of financial institutions that are registered outside China to buy bonds in the interbank market and would scrap quotas for medium and long-term investors. (SD-Agencies)