China plans to increase quotas for outbound investment schemes and roll out pilot scheme to new regions as part of its broader efforts to meet onshore investors' asset allocation needs.

The country will expand the Qualified Domestic Limited Partner (QDLP) as well as the Qualified Domestic Investment Enterprise (QDIE) trials already underway in Shanghai, Beijing and Shenzhen to further meet the needs of domestic investors for global asset allocation, Xinhua reported, citing an unnamed official from China's State Administration of Foreign Exchange (SAFE).

The QDLP pilot scheme in Chongqing and the Hainan free trade zone will also be launched to better support the development of the Hainan free trade port as well as the Chengdu-Chongqing economic circle, according to the report.

As China has yet to fully liberalize its capital account, both schemes, recording the cross-border capital flows mainly for investing in financial assets, are set up for outbound investment. 

Data from SAFE showed that, by September 23, the foreign exchange regulator had approved a $107.34 billion total quota of QDIE, and a $3.36 billion quota was already allocated to 18 institutions, including fund management, securities and wealth management companies.

The QDLP program was launched in Shanghai in 2013 while QDIE was launched in Shenzhen in 2014. Both offer canals for qualified domestic institutions to invest overseas. According to the foreign exchange regulator, the quota for the QDLP program in Shanghai and the quota for the QDIE program in Shenzhen were expanded to $5 billion each in April 2018.

(Cover via CFP)