China has expanded the qualified domestic limited partnership (QDLP) programme to Hainan province, granting up to $5bn in QDLP quotas to the Hainan Free Trade Port, according to state-owned publication Finance China.
The QDLP scheme allows foreign fund managers, within assigned quotas, to be invested in offshore traditional and alternative investments.
It was first introduced in 2012 in Shanghai and was later expanded to include Beijing, Jiangsu, Chongqing and Guangdong ex-Shenzhen, according to Kean Yung Siau, Singapore-based analyst at Cerulli Associates.
“Hainan was designated by the regulators as the next free trade port during last year. They have released details on a pilot programme to transform Hainan into a tax-free trading centre and encourage foreign financial institutions to set up businesses on the island,” Siau told FSA.
At the time, regulators mentioned plans of establishing the QDLP and qualified foreign limited partner (QFLP) programmes in Hainan. In October last year, Hainan’s financial authorities issued draft rules to roll out the schemes on the island.
“So, this approval for $5bn quotas for Hainan QDLP scheme is a follow up on developing the island. It is also a move o further open up China’s financial markets,” Siau said.
Plans for establishing Hainan as a free trade zone dates back to 2018. In January, China drafted a law formalising the island’s free trade port status, following a pilot programme that was launched last year, according to a Nikkei report.
