China Construction Bank Corp (CCB), the nation's fourth-biggest lender, will begin a program to invest abroad for its local customers in August, Vice-President Fan Yifei said.
The investments, under the so-called qualified domestic institutional investor (QDII) program, will be marketed to the lender's 2.7 million corporate and 146 million personal account-holding customers, Fan said in an interview yesterday. He declined to discuss the size of the program or products that will be offered.
China is allowing more investment abroad as it relaxes controls on foreign currency outflows to reduce pressure on its currency. The country's foreign-exchange reserves gained 32.8 percent from a year ago to US$875.1 billion at the end of March.
"QDII is a whole new business for us," said Fan, 42, who was speaking in Hong Kong. "The scale of business will not be significant at the beginning. It will be a long-term program."
CCB is one of six lenders, including Bank of China Ltd, the Industrial and Commercial Bank of China and HSBC Holdings Plc, to win regulatory approval for converting yuan deposits into foreign exchange for QDII investments.
QDII investors will be allowed to buy bonds, baskets of bonds and fixed-income derivatives, China Banking Regulatory Commission Chairman Liu Mingkang said earlier this month.
(China Daily July 14, 2006)
