Canadian Finance Minister Jim Flaherty on Friday welcomed an agreement with China that designated Canada as a destination for Chinese banking wealth management business under China's Qualified Domestic Institutional Investor (QDII) program.

Flaherty said in a press release that the agreement signed with the China Banking Regulatory Commission would give Canadian financial markets access to up to 8 billion U.S. dollars in investment capital.

"This represents a strong vote of confidence in Canada's economic prospects and the soundness of Canada's financial system," said the minister.

The QDII program allows approved institutional investors in China, including banks, fund management companies and insurance firms, to invest funds pooled from the mainland clients in approved overseas financial markets.

The press release said that Chinese banking and securities commissions had concluded an exchange of letters with the provincial securities commissions, allowing Canada to be designated as a destination for mainland China investment, and Canada was working with the China Insurance Regulatory Commission to conclude an agreement to facilitate Chinese insurance companies' wealth management investments in Canada.

Flaherty said that the agreement was timely, as it came when G20 partners discussed the need to maintain open capital markets, and he expressed his hope "to return to China in the near future to continue the valuable dialogue."