China Tweaks Regulations to Ease the Way for Qualified Foreign Investors

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The People’s Bank of China and the State Administration of Foreign Exchange published revisions to the 2020 regulation governing QFII and RQFII

China’s central bank and foreign exchange regulator released revised rules on Friday to streamline investment by qualified foreign investors, in the latest effort to open up the domestic capital market.

The People’s Bank of China (PBOC) and the State Administration of Foreign Exchange (SAFE) published revisions to the 2020 regulation governing the Qualified Foreign Institutional Investor program (QFII) and its yuan-denominated sibling RQFII.

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China is revising its Qualified Foreign Institutional Investor (QFII) and yuan-denominated RQFII rules to streamline foreign investment.
The new rules, effective August 26, simplify procedures, expand currency options, and unify risk management models.
These changes aim to attract long-term foreign capital, reflecting China's commitment to expanding market openness amid economic slowdowns.

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What Happened When

2002：: China initiated the QFII program to let overseas investors buy into its domestic capital markets.

2011：: The yuan-dominated RQFII was added.

November 2023：: The PBOC and SAFE published a draft version of the new rules followed by a one-month public consultation.

By the end of March 2024：: Foreign investors held stakes in 719 domestically traded shares in China, with a total market cap of 105.1 billion yuan ($14.5 billion).

AI generated, for reference only