China's foreign exchange agency.........>

CHINA PRESS: China's foreign exchange agency (SAFE) will lift some restrictions

on Qualified Foreign Institutional Investors (QFII) and provide hedge tools to

qualified institutions in a bid to facilitate capital flows, said Guo Song,

director-general of SAFE's capital account management department, over the

weekend in China Forex, a journal run by SAFE. The country will clarify the

forex management relevant to Panda bonds and further improve the convertibility

of capital accounts, Guo noted. 

Comment: China had strictly controlled the approval of new investment quotas

under the QFII programme in the past two years to stem capital outflows, as the

yuan was weighed down by high depreciation pressures. SAFE is expected to relax

some capital controls this year to further open up its capital account.