China's foreign exchange regulator has granted new qualified domestic institutional investor quotas worth 6.84 billion dollars. Domestic clients can gain a wider selection of products focused on overseas markets through funds, insurers and bank wealth managers.
Eighteen asset managers received one hundred million dollars each, while more than twenty bank wealth management units obtained quotas for the first time. The QDII system provides a regulated route for investment outside mainland China.
Demand for diversification is rising as returns from some domestic assets weaken. The expansion of official channels also follows tighter scrutiny of noncompliant offshore investment accounts.
A larger quota does not remove currency or market risk. It may nevertheless increase product supply and reduce high premiums created by a shortage of permitted options.
