China to Increase Qualified Domestic Institutional Investor Quota by around USD$10 Billion

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China’s forex administration has announced a further increase to the foreign investment quota for qualified domestic institutional investors (QDII).

On 21 October the State Administration of Foreign Exchange (SAFE) announced that it was accelerating the schedule and expanding the scope of QDII quota issuance, with plans to add a further USD$10 billion in stages.

SAFE said that the move was for the purpose of “expediting in-depth bilateral opening of financial markets and servicing the healthy growth of the real economy.”

QDII’s are domestic institutional investors in China that have obtained approval from regulators to invest in offshore securities and bonds, under a scheme first launched in 2006 and overseen by the China Securities Regulatory Commission (CSRC) and the China Banking and Insurance Regulatory Commission (CBIRC).

As of 23 September 2020 China was host to 157 QDII’s that have obtained approval for investment quotas.

SAFE also said that it was currently expanding the scope of trials in Beijing, Shanghai and Shenzhen for Qualified Domestic Limited Partnerships (QDLP) and Qualified Domestic Investment Enterprises (QDIE).

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