By LINGLING WEI, Wall Street Journal

BEIJING—China’s campaign to turn the tightly controlled yuan into a global currency is crossing a new threshold, as the government plans to make it easier for individuals and companies to invest overseas.

The latest initiative, expected to be announced in the next few weeks by the State Council, China’s cabinet, will allow individual Chinese and businesses to directly purchase stocks, bonds and real estate in foreign markets, removing limits on such transactions, according to Chinese officials with knowledge of the matter. Though initially limited to people and businesses in certain designated free-trade zones, the proposal can be scaled up over time, the officials said.

The step-by-step approach is typical of the leadership’s strategy to keep a firm grip and minimize risks as the economy decelerates, while still pushing forward economic reforms.

Efforts to relax capital controls have gained urgency as Beijing is gunning for the yuan, also known as the renminbi, or people’s currency, to be declared an official reserve currency by the International Monetary Fund later this year. Taken together, the actions—including currency-swap deals with other countries and opening stock-trading channels with Hong Kong—advance China’s long-stated national goal of allowing investors and businesses to move money in and out of the country freely.

“This is a breakthrough,” Hans Shen, a senior executive at Hony Capital Ltd., one of China’s largest private-equity firms, said of the new plan. “But it will be implemented with great caution as the government wants to control risks.”

A press official at the State Council referred questions to China’s central bank, which is spearheading the new initiative. The press office at People’s Bank of China didn’t respond to a request to comment.

Freeing up what’s known as the capital account, or cross-border money flows for financial transactions, creates sizable risks. The government wants to avoid a surge of money moving offshore, further weakening the economy, according to the officials. Rapid inflows, too, would put pressure on the yuan to appreciate even more, making it harder for Chinese exporters to compete in foreign markets.

But relaxing capital controls ultimately should give Chinese people greater opportunities in managing their wealth, open up new businesses for financial-services firms and help China’s transition to an economy driven more by consumption and services.

Ordinary Chinese currently have few options for investing their money. Bank deposits frequently pay less than the rate of inflation. A result is a flood of Chinese savings into stocks and property that has fed boom-and-bust cycles in local stock markets and puffed up real estate bubbles in many cities.

To read the full article, click here.

by Alex Knapp of Forbes

Chinese venture capital firm Haiyin Capital has announced investments into a number of high-tech U.S. firms, many of whom are currently on a trip to China to make presentations and visit with investors and businesses there. One such firm is XCOR Aerospace, a commercial space company which aims to take tourists and payloads on suborbital trips into space.

A person with knowledge of the deal has told FORBES that Haiyin’s total investment in the company is $5 million at a valuation of $140 million. When contacted, XCOR declined to comment on this figure or investment.

Haiyin Capital makes an attractive offer to its investment partners, founding partner Yuquan Wang told me: the ability to leverage Chinese manufacturing to help them get their products to market faster, and the opportunity to make inroads into the growing Chinese market while they pursue the U.S. market was well. Things are different for XCOR, though. The company won’t be doing any manufacturing in China, but Wang says that the reason for investing in them is much simpler than that.

“XCOR is a different story. We just like the team. They’re dedicated to something that’s really cool,” he said.

Andrew Nelson, XCOR’s former COO who still works with the company on a consulting basis, told me that the influx of money will be helpful for XCOR as it gears up to conduct test flights of its Lynx spacecraft later this year.

“This round allows us to finish Lynx and build out a bigger marketing and sales program,” he told me. “It will also let us get through our test program and allow our wing design to mature. It’s a challenging wing to build. Six years ago we couldn’t build it, but now we can thanks to 3D printing of titanium parts and advances in composite materials.”

Col. Rick Searfoss, a former NASA astronaut who now is now the Chief Test Pilot for XCOR, is among those participating in Haiyin’s event in Beijing. He’s very positive about the new investment into the company.

“I’m glad our technology is being accepted worldwide,” he told me. “VC isn’t always a good fit with aerospace investment – it’s not like an app that you can get out in 8 months for a huge return. But China’s historically known for taking a long range view of things.”

China is also an attractive target for commercial space. XCOR has so far already sold over 300 tickets for its suborbital flights, over 10% of which have been sold to people in mainland China – including some notable celebrities. During this trip, Searfoss will be presenting some of the excitement about flying a ship in space and what it will be like to fly XCOR’s Lynx.

“As Chinese people are getting richer, they want to do something really cool,” Wang told me. “The meaning of life can’t just be making money.”

That said, Wang hasn’t yet bought a ticket for his flight.

“I take the risk doing investments,” he said. “In my personal life, I’m not a risk taker. But I’ll buy a ticket after a few people have safely gone into space and come back!”

On a more serious note, he added, “Yes, I really would like to try it. But that’s not why I’m investing. Mostly I want to show respect. I love these guys. They’re my heroes. And if it lets me go into space, that’d be fun!”

To read the full article click here.

by Katie Fehrenbacher

Combining the best in Chinese manufacturing with the best in U.S. high tech R&D. At least that’s the idea.

Dozens of some of the most promising high tech entrepreneurs in the U.S. are headed to Beijing over the next day or two for a weeklong trip that could represent the future of U.S.-China technology cooperation.

The trip is organized by Chinese venture capital firm Haiyin Capital, which just finished dispersing its third fund of $50 million into mostly U.S. tech startups like energy storage startup LightSail Energy, based in the Bay Area, solar tech startup 1366 technologies, located just outside of Boston, private space flight company XCOR Aerospace, in Mojave, Calif., and crowdfunding companyAngelList (distributed offices).

The attendees on the trip are mostly entrepreneurs that Haiyin Capital has funded. LightSail Energy‘s co-founder and chief scientist Danielle Fong is already on her way there; LightSail co-founder and CEO Steve Crane leaves today. Frank van Mierlo, the CEO of 1366, is also en route.

The group will start in Beijing, and tour through the manufacturing regions of Hangzhou and Guangzhou, meeting with local businessmen and government officials along the way. They’ll also attend entrepreneur-focused events that Haiyin has organized, some of them giving talks to Haiyin’s network like one next week in Beijing by a test pilot of XCOR’s private space tech.

To read the full article, click here.

by Sara Castellanos of the Boston Business Journal

Chinese venture capital firm Haiyin Capital is flying 10 of its American portfolio companies to China this Friday, including three Boston-area startups.

Woburn-based flying car maker Terrafugia, Bedford-based solar tech company 1366 Technologies and Watertown wireless electricity company WiTricity will be visiting three of China's largest economic-development centers: Beijing, Hangzhou and Guangzhou.

The purpose of the 10-day trip is to entice the early-stage companies in Haiyin's portfolio to possibly open manufacturing plants in China and foster new partnerships with America's up-and-coming tech startups.

To read the full article click here.