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TORONTO (Reuters)—China's insurance regulator has cleared the way to let the country's insurers invest billions of capital in Canadian financial markets, the Canadian government said.
The move, the latest sign of improved trade and financial relations between the two countries, follows a similar rule change by China's banking regulator in April.
"Under this agreement, Chinese insurance companies will be permitted to invest in Canada, giving Canadian financial markets access to a potential pool of about $106 billion Canadian ($106 billion) in investment capital," Finance Minister Jim Flaherty said in a statement.
Ottawa said the China Insurance Regulatory Commission has designated Canada as a destination for Chinese insurance wealth management business under Beijing's Qualified Domestic Institutional Investor (QDII) program.
The program lets approved institutional investors in China, including insurers, invest funds pooled from their mainland clients into approved overseas markets.
China launched the QDII scheme in 2006 to allow domestic funds to be invested abroad. Some saw it having the added benefit of reducing pressure for the yuan to appreciate by increasing capital outflows.