China QFII quota hits US$87.3 bIllion
A total of 278 overseas institutions have received quotas amounting to US$87.3 billion under the Qualified Foreign Institutional Investors (QFII) program to move money into the country’s capital account, the State Administration of Foreign Exchange said.
As of Dec. 28, the quota in the RMB Qualified Foreign Institutional Investors (RQFII) program came in at 528.5 billion yuan (US$76.1 billion).
China’s currency, the yuan, is convertible for trade purposes under the current account, while the capital account, which covers portfolio investment and borrowing, is largely run by the state in efforts to control capital flows in and out of the country.
To gradually open the capital account, the government introduced the QFII and RQFII programs in 2003 and 2011 respectively. They give foreign investors the right to move money into the account, to encourage controlled flows.
The RQFII program is currently open to 18 countries and regions, including the Hong Kong Special Administrative Region, Britain, Singapore, France, the Republic of Korea, Germany, Qatar, Canada, Australia and Luxembourg.