BIZCHINA / News |
China mulls new QFII formula(Shenzhen Daily)Updated: 2007-03-07 14:56 The government is considering a new formula for determining how much portfolio investment can flow into the country, a senior official said yesterday. Under its qualified foreign institutional investor (QFII) program launched in 2003, the government has permitted foreign firms to invest US$10 billion in China's equity and debt markets. Of that total, the State Administration of Foreign Exchange (SAFE) has allocated quotas totaling US$9.945 billion to 48 institutions, leaving just US$55 million to be invested. A regulatory source said last week that, under a revised formula being discussed, the government could set a limit on foreign portfolio investment at 5 to 10 percent of the capitalization of the country's domestic A-share market, which is currently around 10 trillion yuan (US$1.3 trillion). Asked whether policymakers might consider changing the way QFII quotas are calculated, SAFE head Hu Xiaolian said: "We're studying this and we haven't decided yet." Hu, China's foreign exchange regulator, added: "Last year's quota was all used up, so when we arrange this year's quota there should be a change. But no final decision has been made." (For more biz stories, please visit Industry Updates)
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