ELAINE CHAN and GARY CHEUNG

Migrating mainlanders will be allowed to transfer their assets overseas from next month, a move that could ease pressure on the yuan and allow people from the mainland to move to Hong Kong as investing migrants.

Also, foreigners and Chinese in Hong Kong and Macau will be allowed to transfer inheritances out of the mainland.

The rule changes were significant for "protecting individuals' rights of assets and promoting the progress of the full-convertibility of the yuan", China's central bank said last night, announcing the measures.

Under the regulations, only assets worth 200,000 yuan or less can be taken out of the country at one time in a bid to prevent financial volatility.

For amounts over 200,000 yuan, the assets must be transferred in stages and no more than half of an individual's assets can be taken out in the first stage.

The rules are another step forward in the central government's drive to liberalise its foreign exchange system. They open a way for mainlanders previously restricted by foreign exchange controls to move to Hong Kong under the investment immigration scheme.

Beijing is facing growing international pressure to revalue the yuan as investors continue to pour money into the country. China's foreign reserves reached US$514.5 billion at the end of September.

Jonathan Anderson, head of Asia-Pacific economics at UBS Securities Asia, estimated that the central government was buying about US$15 billion a month to maintain a stable exchange rate amid a shaky financial system.

But Mr Anderson expected little impact from the new rules.

HSBC China economist Qu Hongbin agreed. "There's not going to be a huge outflow. It's what the government has been doing ... easing controls gradually."

Still, on the upside, Hong Kong stocks may receive a boost today, with investors betting that more wealthy mainlanders could migrate to Hong Kong.

"Hong Kong is an ideal place for mainlanders to manage their assets and explore opportunities in overseas countries," said Priscilla Lau Pui-king, associate professor of business studies at the Polytechnic University.

Dr Lau said the relaxation could strengthen Hong Kong's status as an international financial centre and would benefit the local property and stock markets.

Under the Capital Investment Entrant Scheme introduced in October last year, overseas investors will get right of abode in Hong Kong if they invest $6.5 million in property or financial assets.

A Security Bureau spokesman said the government was conducting a review of the scheme, including whether to allow the inclusion of mainlanders migrants.

The government had yet to discuss the matter with relevant mainland departments, he added. The Immigration Department said this month it had approved 231 of 582 applications from hopefuls in at least 14 countries, with a total investment of $1.69 billion.

Centaline Property Holdings chairman Shih Wing-ching said Hong Kong could get the lion's share of the outflow of mainlanders' assets because of their affinity in language and culture.

"The relaxation will give a boost to Hong Kong's property market, with luxury flats and office flats likely to get the biggest benefits."