China has granted a CNY80 billion ($12.9 billion) quota to Germany under the Renminbi Qualified Foreign Institutional Investor (RQFII) program.
The quota will enable domestic investors to purchase securities in China and will help boost those fragile markets and further accelerate the internationalization of the Chinese currency.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
The quota was announced during a visit by German Chancellor Angela Merkel to China to meet Premier Li Keqiang and President Xi Jinping.
Li Keqiang said that six documents in economic cooperation will be signed between the two governments during her visit.
Additionally, the quota will allow investors in Germany to participate in both the Shanghai and Shenzhen bourses through the Renminbi Qualified Foreign Institutional Investor scheme and also boost the set up of off-shore RMB market in Frankfurt.
Li Keqiang said: "A high-level financial dialogue will also be set up to boost financial cooperation."
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataMerkel said that the move will enable Germany to enhance its investment environment and attract more Chinese investors.
Merkel said that Germany is keen to make full use of intergovernmental consultations with China to strengthen cooperation in the fields of innovation, joint research, market access, new urbanization, energy conservation, climate change and health services.
Furthermore, Germany will also work closely with China in international and regional affairs, and to face challenges and realize common development.
Li Jianjun, a financial analyst at Bank of China’s International Finance Research Institute, said:"The renminbi is still at the initial stage of internationalization. We are expanding the offshore yuan pie and setting up a global network with overseas financial markets. Allowing qualified foreign institutional investors to use the yuan will benefit China and other countries," Jianjun added.
