China to expand RQFII programs

Updated: 2012-03-03 16:24

By Chen Jia (

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BEIJING – China's securities regulator pledged to expand the pilot programs of renminbi Qualified Foreign Institutional Investors (RQFII) and approve further overseas investment this year, welcoming more suggestions from the top political advisors.

"We will find a right time to introduce the two-way cross-border exchange trade fund (ETF) to the market," said a statement from the China Securities Regulatory Commission (CSRC) on March 2.

Analysts expect that the increased RQFII quota, about 50 million yuan, may be first injected into the A-share ETF in the Hong Kong market.

This is an important measure to finance back the offshore renminbi and stimulate the domestic stock market, said Li Daxiao, director of the Yingda Securities Research Institute.

Guo Shuqing, chairman of the regulatory commission, vowed to speed up the introduction of overseas strategic investors and create more yuan-denominated trading tools, especially for the ETF.

By the end of 2011, nine fund businesses and 12 securities companies had shared the pilot 20 billion yuan quota of RQFII, according to the State Administration of Foreign Exchange.

During last year's annual sessions of the National People's Congress and the Chinese People's Political Consultative Conference, officials and experts highlighted measures to develop renminbi investment instruments and consolidate an international financial center in Hong Kong.

"These topics will still be intensely discussed at the ongoing two sessions in Beijing this year," said Li. "We are waiting for more efficient suggestions to help the Chinese mainland open its securities market."

The CSRC showed its sincerity for hearing from the two session's members to improve work efficiency and stabilize the capital market development.

According to the statement, during the last year, the CSRC has undertaken 196 proposals and suggestions which amounts to an increase of more than 20 percent compared to 2010.