China is scrapping a quota system for foreign institutional investment, freeing fund managers to buy up stocks and bonds without a hard limit as Beijing seeks to cushion the impact of an economic slowdown and its trade war with Washington.
The State Administration of Foreign Exchange said on Tuesday evening that it had decided to scrap the overall ceiling of $300bn on total asset purchases under its qualified foreign institutional investor, or QFII, scheme.
“Henceforth, foreign institutional investors with the relevant qualifications can simply remit funds to carry out investment in securities in compliance with regulations,” the regulator said in a statement after markets in Shanghai and Shenzhen had closed. Safe added that the move would “greatly enhance” the convenience of participating in China’s onshore market for foreign investors.