China International Capital Corp. (CICC), the country's first
joint-venture investment bank, acquired a qualified domestic
institutional investor (QDII) investment quota of 5 billion U.S.
dollars, a senior foreign exchange management official said over
the weekend.
CICC's shareholders include Morgan Stanley International.
Sun Lujun, deputy head of the capital project department under
the State Administration of Foreign Exchange, said that by early
December, the forex market regulator had verified a total of 23
billion U.S. dollars as QDII quotas for China Southern Fund, Huaxia
Fund, Harvest Fund and China International Fund.
Sun said that through the end of October, 16 QDIIs had put on
the market 154 QDII products. Sun added that 28.6 billion U.S.
dollars was actually remitted abroad for QDII operation by the end
of the month. The total indicates that capital flows accelerated
sharply over the past few months as from April 2006 to March 2007,
funds remitted abroad were only 4 billion U.S. dollars or so.
Shanghai Securities News said last Friday that Chinese
banks' QDIIs would likely be allowed to invest in U.S. and European
stock markets. The move is expected to be one of several steps by
the Chinese government to expand investment channels and disperse
excess liquidity, which has driven up domestic stock markets.
In May, bank QDIIs got regulatory approval to invest in Hong
Kong stocks. It was the first time they were allowed to invest in
overseas stocks instead of being restricted to fixed-income
products.
Bank QDIIs are restricted to investment in securities markets
whose regulators have signed memoranda of understanding with
China.
(Xinhua News Agency December 17, 2007)
