The ceiling on foreign investment in Chinese securities will be raised to $30 billion from $10 billion, Beijing's foreign exchange regulator said on Sunday ahead of cabinet-level talks with the United States.

China agreed to raise the cap in May during the last such talks, but there have been no fresh approvals under the Qualified Foreign Institutional Investor (QFII) scheme since February when the $10 billion ceiling was reached.

U.S. Treasury Secretary Henry Paulson will lead the U.S. delegation at the next round of the strategic economic dialogue near Beijing next Wednesday and Thursday.

To further open the country's capital markets to foreigners, the QFII investment quota will be raised to $30 billion, the State Administration of Foreign Exchange (SAFE) said in a statement on its Web site, www.safe.gov.cn.

It said China would control the pace of new portfolio investment to encourage medium and long-term investment in the world's fastest-growing major market.

The QFII scheme had increased the global influence of China's capital markets and improved corporate governance, SAFE said.

Foreign banks such as UBS and Credit Suisse have already said they want bigger QFII quotas.

SAFE also reaffirmed its intention to let residents invest more overseas under the Qualified Domestic Institutional Investor program, the outbound counterpart of QFII.

At the same time, SAFE will broaden overseas securities investment by domestic residents to further enlarge the investment size under the QDII program, the agency said.

To that end, SAFE said it would support domestic institutions that offer a broader range of overseas investment funds for retail investors.

Apart from giving Chinese the chance to diversify their investments, QDII had helped China to promote a better balance in its international payments, the currency regulator said.

(Reporting by Kirby Chien and Zhou Xin; Editing by Alan Wheatley)

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