The Chinese banking watchdog has approved 17 banks as qualified domestic institutional investors (QDII) and expects more banks to offer QDII services, said Tang Shuangning, vice chairman of the China Banking Regulatory Commission (CBRC).

The 10 domestic and seven foreign-funded banks have initiated a total of nine QDII products, involving subscriptions of 2.3 billion yuan (US$287.5 million) and US$900 million.

Tang said QDIIs opted for Hong Kong as their main destination for overseas investments as a result of the increasing economic ties between the mainland and the Asian financial center in recent years.

The CBRC would take great efforts to boost the QDII program, by encouraging the mainland banking institutions to strengthen communication with the regulators and their counterparts in Hong Kong.

China started the QDII program in July, allowing domestic institutions and residents to buy financial products overseas via mainland commercial banks and other financial institutions.

Statistics show China's foreign exchange authority had granted overseas investment quotas totaling US$10.3 billion to eight QDIIs by the end of September.

(Xinhua News Agency December 2, 2006)