The foreign exchange regulator will quicken the process of granting quotas to foreign firms that want to invest in China's main stock and debt markets, domestic media said Wednesday, as the government expands the fledgling program to combat a market slump.

Investors that gain entry to the so-called Qualified Foreign Institutional Investor (QFII) program would in future receive quotas for investment within two months, the Shanghai Securities News cited foreign exchange regulatory officials as saying.

China has said it would more than double to US$10 billion the amount that foreign firms are allowed to invest in its primary stocks and debt markets — now closed to all but a few dozen firms — from US$4 billion previously.

Approving investors and granting investment quotas has been a time consuming process, even though the government has said it wants the system to bring in foreign capital and expertise to help develop capital markets and prop up stocks mired in multi-year troughs.

The newspaper did not mention whether the approval of licenses for qualified investors would be accelerated as well. Foreign investors first have to win a license from market regulators before obtaining investment quotas from the foreign exchange regulator — a process that can take about half a year.

"(In the future,) the process for approving a QFII quota will not be as long as two months," the newspaper cited an official at the State Administration of Foreign Exchange as saying.    

 (Shenzhen Daily November 10, 2005)