(Update) Here is a Chinese article explains more details. The minimum balance is RMB 300,000 to open an account inside China. Other restrictions apply.
(Original) I was wondering why the Chinese ADRs all rose today. Although I heard the China central bank is allowing domestic bank buy oversea stocks through QDII. This MarketWatch article connected the dots for me. I think this is a small way the goverment tries to divert some money from the red hot domestic stock market, especially the B shares market.
I am still not sure how it works exactly, but this is the first time Chinese residents can buy foreign stocks (indirectly). Think how much the world has changed: in the past China has been the largest receipient of foreign investments. Now with the money saved through the years, they can invest in the west (buying stocks). Of course they will bid up the Chinese ADRs (China Mobile, Petro China, etc.) first because this is what they are familar with.
QDII stands for domestic qualified institutional investors. There are some Chinese domestic banks that were given quota regarding how much money they can invest in overseas stocks.