Chinese to invest abroad in free-trade zone trial
Trial scheme could allow Chinese individuals in the Shanghai Free Trade Zone to invest in overseas markets directly for the first time
China may launch a trial scheme soon that would allow Chinese individuals in the Shanghai Free Trade Zone to invest in overseas markets directly for the first time, two sources with direct knowledge of the matter said on Wednesday.
The programme, known as the Qualified Domestic Individual Investor programme, or QDII2, is among measures jointly proposed by the Shanghai government, the central bank and regulators to promote capital account convertibility and greater international use of the yuan.
"Preparations [for QDII2] have been going on for two years, and implementation should be quite soon," one source said.
"Everything is ready and it's almost certain that the programme will be launched in the first half of this year."
The sources said qualified individuals would be able to invest in overseas markets without foreign exchange restrictions but regulators may set a combined limit for how much these investors could trade outside of China.
Individuals would be required to offer certificates of their income to prevent potential money laundering or illegal transfers of assets, the sources said.