BIZCHINA / News
Nation to loosen restrictions on QDII overseas investment
(Xinhua)
Updated: 2007-04-02 09:13
China plans to loosen restrictions on qualified domestic institutional
investor (QDII) investment targets so that they can invest in new
sectors, said Li Dongrong, vice director of the State Administration of
Foreign Exchange (SAFE) last Thursday.
Li made the remarks at the 2007 China Derivatives Summit. He said that
together with the China Banking Regulatory Commission and the China
Insurance Regulatory Commission, SAFE is mulling over the selection of
potentially profitable new sectors.
SAFE is also considering including securities companies in the QDII
system.
QDIIs are currently allowed to invest only in fixed-return financial
products.
China's QDII program is still in its infancy and the products are not
selling well because of the narrow investment scope, high risks, low
profits and poor accessibility, he said.
Furthermore, investors - both companies and individuals - would rather
hold renminbi than convert them into foreign currency because the yuan
keeps on appreciating.
China launched the QDII system in July 2006, allowing QDIIs to raise
renminbi funds from domestic individuals and institutions and buy foreign
currency from SAFE for overseas investment.
So far, 30 financial institutions - 11 domestic banks, seven foreign
banks, 11 insurance companies and one mutual fund - have been granted
QDII status.
(For more biz stories, please visit Industry Updates)
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