Foreign investors get $50 billion boost
May 04, 2012 | BY
clpstaff &clp articlesThe CSRC has raised the amount available to qualified foreign institutional investors to $80 billion. The $50 billion increase is the largest since the launch of the pilot programme in 2002.
The qualified foreign institutional investor (QFII) programme allows investors to buy Chinese securities, stocks and bonds. It targets long-term investors such as insurance companies, pension funds, asset managers, securities firms and banks.
When China joined the World Trade Organization (WTO) back in 2001, the government pledged that it would award $30 billion in QFII quotas by 2013, which it has now surpassed. The decision to more than double the amount is a strong sign that the government and CSRC are committed to further opening up the country's capital markets.
“There is also an overwhelming demand from foreign investors looking to Chinese securities amid the existing Euro financial problems and the expected slow US recovery,” said Hubert Tse, a partner at Boss & Young specialising in QFIIs. The increase comes on the back of poor performance of Chinese A shares in 2010 and 2011.
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