Move helps funds come into China 
2019-01-15
China’s foreign exchange regulator said yesterday that the quota for the Qualified Foreign Institutional Investors program will be doubled to US$300 billion to boost investment in the country’s capital markets.
The move, approved by the State Council comes at a time when the country is further opening up its financial markets and the increased quota aims to meet overseas players’ rising investment needs in the world’s second-largest economy, the State Administration of Foreign Exchange said in a statement yesterday.
Introduced in 2003, the QFII scheme is designed to attract long-term overseas market participants, including brokerages, fund houses and trust firms, to use offshore yuan to directly invest and trade in publicly-listed domestic securities.
Since then, China has been relaxing rules to encourage more inbound investment.
In June 2018, SAFE, together with the People’s Bank of China, unveiled a new round of reforms in a bid to further encourage and help overseas investors.
The ceiling of 20 percent for remittances abroad was abolished and qualified foreign investors were allowed to conduct foreign exchange hedging.
The STCN financial news agency quoted Li Lifeng of Sinolink Securities saying yesterday’s move underlines the government’s determination to further open the financial industry and will help attract more foreign investment.
But Li also warned it remains to be seen to what extent it will lift foreign players’ confidence in the A-share market
Li said the move is more of a symbolic measure in the short term.
