In what would be a drastic liberalization of China's huge but still cloistered capital markets, the country's top securities regulator said Monday that foreign investment could be allowed to rise as much as tenfold.
Citing the still-nascent levels of overseas participation in domestic stock markets — despite recent actions more than doubling the amount of money that foreign funds can invest there — Guo Shuqing, the regulator, hinted that 2013 could bring sweeping new measures to open financial markets in China, which has the world's second-biggest economy, after that of the United States.
''For our capital markets to mature, they must open more in the future,'' Mr. Guo, the chairman of the China Securities Regulatory Commission, said Monday at a financial forum in Hong Kong. ''Our goal is to make it easier for nonresidents to issue and trade securities in the domestic markets."
Shares in Shanghai leaped 3.1 percent Monday after Mr. Guo's comments, as investors speculated that a wave of foreign cash could be set to hit the mainland stock markets. That added to a month ng rally in which the benchmark Shanghai share index has rebounded 18 percent from early December, when it hit its lowest levels in more than three years.
With a total capitalization of about 20 trillion renminbi, or $3.2 trillion, China's domestic stock market ranks as one of the biggest in the world, but it is also one of the most restricted among major economies.
Mr. Guo has been pushing hard to remove some of these investment barriers. In his comments Monday, Mr. Guo said that foreign investors hold only about 1.5 percent of the domestic share market by value. ''I think at least we can increase that 10 times,'' he said.
Some observers expressed deep skepticism at the remarks. ''This is great headline stuff, but I don't think it is particularly constructive, because you are not going to simply take the lid off and increase everything by 10 times,'' said Fraser Howie, the co-author of ''Red Capitalism: The Fragile Financial Foundation of China's Extraordinary Rise.''