In a sign of how Western and Chinese firms are co-operating in some investment areas, two of the world's largest banks have launched a fund to tap into Chinese markets.

Luxembourg regulators have given the green light for a Chinese equities fund overseen by Industrial and Commercial Bank of China and Credit Suisse, highlighting how China continues to push for more exposure to its investment markets.

The ICBC Credit Suisse S&P China 500 Index Fund is being launched under the ICBC (Europe) UCITS SICAV umbrella. Clearance was granted by the Commission de Surveillance du Secteur Financier and is the first UCITS product to access China via the Luxembourg Renminbi Qualified Foreign Institutional Investor quota, the banks said.

The rollout came after ICBC (Europe) obtained its RQFII licence in November and Luxembourg RQFII quota in December. ICBC Credit Suisse Asset Management International will manage the fund.

The Chinese and Swiss banks said the S&P China 500 Index upon which the fund is based differs from other China funds by greater diversity of economic sectors. It comprises 500 of the largest, most liquid Chinese companies while approximating the sector composition of the broader equity market.

All Chinese share classes including A-shares and offshore listings in Hong Kong and the US are eligible for inclusion in the index.

"The S&P China 500 Index is designed to capture the 'total China' story in a more complete, diversified and efficient approach," Richard Tang , CEO of ICBCCS International, said in a statement.

The fund will be first registered in Luxembourg, Belgium, France, Italy, Spain, Germany, UK, Switzerland and the Netherlands, and is available in different share classes including renminbi, dollars, euros, sterling and Swiss francs.

Credit Suisse and ICBC launched their joint venture in 2005.