SHANGHAI May 26 China will soon launch a new
pilot scheme in six cities allowing individuals to invest
directly overseas, the official Securities Times reported on
Tuesday, potentially unleashing billions of dollars in Chinese
savings on global stock and bond markets.
The Qualified Domestic Individual Investor programme,
commonly known as QDII2, is the second iteration of a scheme
whose first version was limited to institutions. It will
initially be launched in six Chinese cities: Shanghai, Tianjin,
Chongqing, Wuhan, Shenzhen and Wenzhou, the Securities Times
said, quoting unnamed sources.
Individuals with at least 1 million yuan ($160,000) of
financial assets can apply to join, the report said.
QDII2 would be Beijing's latest step to deregulate China's
capital markets, following the launch of the Shanghai-Hong Kong
stock connect last November which allows Chinese individuals to
buy stocks in Hong Kong.
The previous QDII scheme, which allowed institutions to
invest overseas within set quotas, proved unpopular with most
investors, which analysts blamed poor marketing by domestic fund
managers and a general lack of interest among Chinese retail
QDII2 would be wider in scope than the Hong Kong connect
programme, which is focused on guiding Chinese investors into
stocks related to China and offers little opportunity for risk
diversification, while keeping a tight rein on the risk of
QDII2, on the other hand, will allow individual Chinese
investors to snap up shares in New York, London or Paris.
The report gave no detailed time frame for the launch,
saying only that it would be "soon".
In March, Shanghai said it hoped to start QDII2 in its free
trade zone this year.
($1 = 6.2038 Chinese yuan renminbi)
(Reporting by Samuel Shen and Pete Sweeney; Editing by Edmund