China will gradually open its securities market to foreign investors and will fulfill its commitments after the WTO accession, said Zhou Xiaochuan, chairman of the China Securities Regulatory Commission (CSRC) Thursday.

Addressing a press briefing at the 16th World Congress of Accountants, Zhou said China started to open its securities market to foreign investors in 1992, when B share market was launched and then some Chinese enterprises were listed overseas.

Recently, the regulation and application criteria concerning the Qualified Foreign Institutional Investor (QFII) were stipulated and many foreign-funded financial institutions showed great interest about it and are actively preparing for the application, he said.

He said that the CSRC has received some preliminary documents and the QFII is in sound progress.

Zhou noted that the key to the QFII, as a trial, is to set up a mechanism and that greater steps then could be taken based on its success.

As to how large the QFII would become in one or two years' time, Zhou said it is a question involving interaction between each side of the market, and the regulator could not set a target in advance.

Zhou said the QFII was initiated in 1998 and was not introduced until now, showing that the policy was prudently formulated and that it requires a process to reach the agreement after study and discussion.

The QDII (Qualified Domestic Institutional Investor) also requires a process of study and discussion before reaching the agreement and it is hard to set a timetable as the study is not mature enough, he said.

When asked to comment on the CSRC's international cooperation, Zhou said the CSRC has signed MoUs with regulatory authorities in more than 10 countries, specifying the cooperation on market supervision between both sides.

The CSRC is also actively participating in the International Organization of Securities Commissions (IOSCO) and the CSRC's international cooperation is generally in sound progress, he added.

(Xinhua News Agency November 22, 2002)