RQFII and QFII Landscape

Data as of  March 2020

The pace of China’s capital market liberalization has accelerated over the past years. Exciting market developments comprise the inclusion of Chinese equities and bonds into global indices, the convergence of the access schemes and the expansion of asset classes. These are game changers, and present unprecedented investment opportunities for foreign institutional investors to invest in China.

Find out more about the evolving landscape and the latest market pulse on the Renminbi ("RMB") Qualified Foreign Institutional Investors ("RQFII") and Qualified Foreign Institutional Investors ("QFII") programs – two of the oldest access schemes in China.

About the Schemes

The QFII and RQFII are the two earliest inbound schemes launched by the Chinese government. These schemes allow foreign institutional investors who meet certain qualifications to invest in China’s capital markets.

The RQFII scheme was originally introduced in December 2011 as an enhancement of the QFII scheme established in 2002. The key difference is that QFII quota-holders have to convert foreign currency into RMB in order to invest directly in Chinese securities, whereas RQFII quota-holders could invest directly in China’s domestic capital markets with offshore RMB.

The Chinese government welcomes foreign direct investment into its domestic market, and has continuously been revising and relaxing its rules on market accessibility, regulatory reforms and capital mobility.

Two latest developments pending implementation include:

  • Amendment of QFII/RQFII investment rules were drafted to merge the two schemes
  • Proposal to remove QFII/RQFII investment quotas

Please visit this site for the latest updates, as China continues to liberalize its capital markets and boost foreign participation.

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