Will Foreign Investment increase in china’s foreign market?

Investments from China into foreign markets will increase, along with opportunities for various financial institutions, based on China's recent liberalization of foreign exchange. In addition to further relaxation of controls on foreign exchange current accounts, China has taken its biggest step towards freeing outbound restrictions on capital accounts, by giving Chinese commercial banks, mutual funds, securities institutions and insurers greater opportunities to invest in overseas financial products.

These opportunities are likely to become part of a Qualified Domestic Institutional Investor programmed (QDII), which has been rumored for several years, and which would build upon the PRC's experience with the Qualified Foreign Institutional Investor programmed (QFII) that was formally introduced in 2002 as a liberalization of inbound investment into the PRC by qualified foreign investors. Beneficiaries in the short term will include not only PRC portfolio investors and financial institutions but also foreign financial institutions, which can expect expanded joint venture opportunities as well as instructions to act as investment managers and custodians. In the long term, these changes are likely to increase the ability of PRC financial institutions to compete on the global stage.

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