SHANGHAI - China has resumed issuing quotas under its scheme to allow domestic investors to put money into overseas markets after a 17-month halt, as global markets stabilise and the country seeks ways to channel its mounting foreign exchange reserves.

EFund Management has been issued a US$1 billion (S$1.4 billion) quota by the State Administration of Foreign Exchange, China's foreign exchange regulator, under the country's Qualified Domestic Institutional Investor (QDII) scheme, a company executive said.

'China's foreign exchange reserves are growing very rapidly, so there should continue to be issuance of additional quotas,' the executive said.

China is expected to see rising capital inflows in the second half of this year as expectations mount for an appreciation of its yuan currency, and the authorities are keen to seek ways to channel funds abroad.

The government started the QDII programme in 2006 to allow Chinese money to be invested abroad, but early investors suffered badly from the global financial crisis.

China effectively halted the issuance of new QDII quotas following the last approval in May last year, reflecting the worsening performance of QDII funds as global market conditions deteriorated.

But investor confidence has picked up in recent months as global stock markets rebounded.

The EFund executive also said the company was aiming to sell funds focusing on equities in Asia excluding Japan, with a formal product launch expected in December.