China is to allow foreign investors to trade in stock index futures under the Qualified Foreign Institutional Investor (QFII) programme, according to China Securities Journal. Foreign investors may be allowed to invest up to 10% of their agreed quota in stock index futures, according to the report.

The news is seen as a move by the Chinese Government to make investment options in the stock market (the world’s third largest) easier than it is at present. A spokesman for Shanghai-based Citic Newedge Futures said, “The significance lies in the fact the index-futures market will see foreign capital inflows and the market will become more international”.

China began trading in futures earlier this year. Share prices in China have plunged this year amid fears about the country’s ability to achieve economic growth. The performance of futures is tracked by the CSI300 Index.

China concluded an agreement with the United States in May of this year to allow investors under the QFII scheme to invest in stock index futures and quotas in excess of USD17 billion were agreed by the end of last month.