China and Japan have launched a cross-border investment scheme that will link the two countries’ markets, according to a statement from the China Securities Regulatory Commission (CSRC).

The CSRC statement said the east-bound leg of the Sino-Japan ETF connect will enable Chinese asset managers to set up Shanghai-traded ETFs through the Qualified Domestic Institutional Investor (QDII) scheme that invest at least 90% of assets in Japanese ETFs that track either the Nikkei 225 or Topix.

The move follows the announcement last month the Japan Exchange Group and the Shanghai Stock Exchange had been establishing a Japan-China ETF connectivity agreement.

The scheme is aimed at improving the opportunities for cross-border investment between Chinese and Japanese markets.

It will enable ETF providers from either country to develop a feeder ETF that will invest in the counterparty’s ETFs.