The new rules for China’s outbound investment QDII program

China plans some new rules for the Qualified Domestic Institutional Investor program to further facilitate the cross-border investment and help the fundraising environment.

The annual foreign exchange quota for individual investors, which is US$50,000, remains unchanged but conversion of foreign exchange will be eased and the new QDII rule allows foreign investors to invest a base amount in the domestic market without needing approval and allows them to move funds in and out of China more easily.

This time, it seems that central bank this time has no intention to limit large individual transactions. The quota won’t be making any adjustment because of government’s confidence in curbing capital outflow. Since the beginning of 2016, the individual foreign-exchange transactions tracking system was launched on a national level for both online and in bank branches to monitor the capital outflow which is popular among mainland investors to invest in overseas capital markets as well as real estate market because of the RMB depreciation. This means that Chinese government encourage the financial cross-border investment within a certain capital range and offers the individual investors more investment channels for wealth management.

Despite the regulatory blockage on anything outbound, it’s good to see that the regulators haven’t completely shut down reform.