China Raises Foreign Investment Limit to $1B

Although it has traditionally shied away from foreign interaction, China’s recent decision to raise the maximum limit placed on foreign institutional investments to $1 billion shows that China may want to be a bigger part of the global economic community. The rules took effect on September 29th and were made public by China’s foreign exchange regulator over the weekend.

The State Administration of Foreign Exchange issued a draft of a change to the rules that would allow the investment limit to be raised earlier this month. China also left open the possibility of further changes to the limit in the future in accordance with the foreign-exchange market, China’s balance-of-payment situation, and other external economic situations.

China also plans to adjust the lock-up period from the Qualified Foreign Institutional Investor program, shortening it from one year to three months. While these rules only apply to certain investors, this change and China’s other changes to its various trade regulations will allow China to become an even more dominant force in the global economy.

Chinese Flag (Image: Flickr)