China is working on a program to allow insurance companies to invest in overseas capital markets, said a high-level Chinese official.

"The State Council has approved in principle our proposal to allow insurance companies to invest in overseas capital markets," said Ma Delun, deputy director of the State Administration of Foreign Exchange (SAFE).

"We and the China Securities Regulatory Commission are currently working on details of the program," Ma said at a recent forum on the capital market, explaining that Chinese insurance companies lack channels to increase the value of their foreign currencies.

"Basically, their only choice is depositing the money in banks and waiting for the interest to accrue," Ma said.

Ma also revealed other measures being considered to further open China's capital market, including allowing Chinese emigrants and non-Chinese citizens to transfer their assets abroad, establishing a qualified domestic institutional investor (QDII) system and allowing social security funds to invest abroad.

The QDII system, which would allow domestic institutional investors to invest in capital markets abroad, is expected to be established this year.

(Xinhua News Agency May 28, 2004)