Reference:CGTN | Updated:25 Oct 2020
China is considering a pilot reform plan for its Qualified Foreign Limited Partnership (QFLP) program to further relax rules for foreign investment, a deputy head of the State Administration of Foreign Exchange (SAFE) said Friday in a briefing in Beijing.
The forex regulator will expand the range of investment open to foreign investors, explore a model for cross-border financing and investment of private equity funds, and help attract more first-class investment institutions overseas to settle in Beijing, Wang Chunying said.
First piloted in Shanghai in 2011, the QFLP program allows foreign institutional and individual investors to invest in Chinese assets through fund managers. It is now piloted in other cities, including Beijing, Tianjin, Chongqing, Shenzhen, Zhuhai, Guangzhou, Qingdao and Guiyang.
It is worth noting that the QFLP program only allows investment in equity and investment in debt requires additional approval.
Beijing issued a guideline in June to allow qualified foreign institutions in the capital to pilot the Qualified Domestic Limited Partnership (QDLP) program and raise renminbi funding from qualified domestic investors for investment overseas. Launched in 2012 in Shanghai, the QDLP program offers domestic investors foreign investment opportunities.
Wang said the Beijing Financial Assets Exchange is allowed to conduct cross-border transfer of banks' bad assets to further revitalize the bad assets and better support the real economy.
According to the forex regulator, about $10 billion in new quotas will be awarded to the Qualified Domestic Institutional Investors (QDII). Launched in 2006, the QDII program allows domestic institutional investors to invest in offshore securities and bonds within allowable quotas.
Wang added that the forex regulator is also exploring more forms of cross-border investment in two ways, and will further relax restrictions on overseas investment by domestic institutional and individual investors.