The Qualified Domestic Institutional Investor scheme must be launched urgently to balance money flows between the SAR and the mainland, according to Hong Kong Monetary Authority chief executive Joseph Yam Chi-kwong.
It was quite easy for Hong Kong money to flow to China, but there were more obstacles in reverse, Mr Yam said yesterday on the sidelines of the Boao Forum for Asia business and government leaders in Hainan.
The scheme will allow mainland funds to buy Hong Kong stocks. Under the scheme, a mainland individual or corporate investor would put money into a fund, likely to be closed with a fixed term, which would be managed by an institution approved by the People's Bank of China.
It has been reported that the initial size of the fund would be only US$3 billion, probably not large enough to boost Hong Kong's stock market capitalisation, which stood at US$494 billion at the end of last month.
'The size of the capital to be flowed into Hong Kong is not the most important [concern]. The most important thing is that the scheme will establish a channel to improve money flow from the mainland to Hong Kong,' Mr Yam said on Hong Kong's Cable Television.
The QDII scheme was initially proposed by the Hong Kong Government last year, aimed at attracting mainland capital to help stimulate the Hong Kong stock market.
Last month, Dai Xianglong, governor of the People's Bank of China, said Beijing would consider the proposal, which was seen as part of efforts to mobilise the country's billions in individual savings and support the SAR.
