China makes way for foreign investors as it scraps quota system

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  • Asian Market
  • 4 months ago
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China will get rid of a quota system for foreign institutional investment, hence allowing fund managers to purchase stocks and bonds without a hard limit as Beijing aims to ease the impact of the current economic slowdown it has been suffering due to its trade war with the U.S.

The State Administration of Foreign Exchange announced that it had decided to scrap the overall ceiling of $300billion on total asset purchases under its qualified foreign institutional investor, otherwise known as the QFII scheme.

Regulators released a statement yesterday following the mainland indices’ closures, “Henceforth, foreign institutional investors with the relevant qualifications can simply remit funds to carry out investment in securities in compliance with regulations.”

A move that would “greatly enhance” the convenience of participating in China’s onshore market for foreign investors.

The QFII programme was originally launched in 2002, allowing broad access to onshore stocks and bonds however limiting participation to few institutions.



Source: Smart Trend Team