Study on QDII scheme to continue

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Last updated at: (Beijing Time) Thursday, October 09, 2003

Study on QDII scheme to continue

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China will keep studying a proposed scheme to let mainland residents invest on overseas stock markets such as Hong Kong, forex and market regulators said Wednesday, shrugging off reports and speculation the plan had been shelved.

Rampant talk of a quick launch for the Qualified Domestic Institutional Investor (QDII) programme, which allows people to pour money into overseas bourses via selected institutions, has swirled for months.

Britain's Financial Times reported China was set to put off the scheme "indefinitely" because the plan could divert a large amount of funds from the already weak Shanghai and Shenzhen markets.

Regulators reiterated Wednesday the plan would go ahead, just not now. Some analysts had expected details on QDII to emerge only late this year, at the earliest.

"The study is still going on, though we still have no timetable on when to launch the scheme," said a spokeswoman for the State Administration of Foreign Exchange, which has the final say on how hard currencies flow out of the country.

Chinese officials had repeatedly discounted the possibility QDII could be launched in the short term because of more pressing matters, such as improving corporate governance.

They have also said the plan would eventually comprise a key part of efforts to offset upward pressure on the yuan.

A spokeswoman for the China Securities Regulatory Commission (CSRC), the stock market watchdog, also shrugged off the news.

"We have never announced a timetable to launch QDII, so there's no postponement," she said.

Analysts had said the CSRC had been much more focused on ensuring the Qualified Foreign Institutional Investor scheme, which allows foreign investors into the main local stock and debt markets, went without a hitch.

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