Qatar is applying for a licence to invest $5bn in China's Qualified Foreign Institutional Investor (QFII) scheme, the main channel for foreign investment in Chinese stock and bond markets.

Mohammed Bin Saleh al-Sada, Qatar's energy and industry minister, said that the QFII quota will be used to invest income earned from selling liquefied gas to China in the country's securities market as well as initial public offerings.

QFII quotas are currently capped at $1bn per each investor but official media reported last month that Chinese regulators are looking at increasing the cap.

Thirty-seven QFIIs, including Norges Bank and Abu Dhabi Investment Authority, have applied to increase their quotas by a combined $12.54bn, it said.

China has launched a series of initiatives intended to attract more investment in the country's capital markets, including stepping up efforts to expand the QFII programme, which it launched in 2003.

Under the QFII programme, an investor is given a licence and an investment quota by regulators.

Last week, China's securities regulator said it was looking at increasing the cap on the combined stake in a listed company held by QFIIs to 30 per cent from 20 per cent.

Earlier this year, the government raised the total maximum QFII quota by $50bn to $80bn.

As of April 16, China had granted QFII licences to 170 investors, and 129 of them had obtained combined quotas of $25.19bn from the country's foreign exchange regulator.

The State Administration of Foreign Exchange has said it will adopt fast-track procedures and allocate more quotas to foreign investors such as pension funds, government-linked funds and insurers.