China Securities Regulatory Commission (CSRC) announced on April 3 that it has expanded its Renminbi Qualified Foreign Institutional Investor (RQFII) pilot program by increasing the investment quota by 50 billion yuan ($7.94 billion) from the previous 20 billion yuan ($3.18 billion).

The RQFII mechanism, which was launched in December 2011 to widen investment channels for overseas yuan funds on the Chinese mainland, allows qualified investors to invest yuan-denominated funds raised in Hong Kong in the mainland securities market within a permitted quota.

The CSRC will allow institutions under the RQFII program to issue exchange-traded funds made up of A shares and consider further expanding the scale of the pilot scheme, the range of institutions and investment proportion.

The State Administration of Foreign Exchange kicked off the RQFII trial scheme in December 2011 with an initial quota of 20 billion yuan, aiming to facilitate the back flow of the yuan and promote the internationalization of the currency.

The CSRC has also expanded the investment quota of Qualified Foreign Institutional Investor (QFII) by $50 billion.

Launched in 2002, the QFII program has so far allowed overseas investors to make investments in China's stock markets under a preset investment quota of $30 billion. To date, China has granted 158 QFIIs from 23 countries and regions, according to the CSRC.