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Chinese managers lobby against foreign investors

Mainland China’s fund groups have clubbed together to lobby Beijing against expanding the renminbi qualified foreign institutional investor (RQFII) scheme, according to reports.
The Chinese Asset Management Association is concerned with plans to allow foreign investors greater access to renminbi-denominated investments on the mainland, believing this could threaten their businesses.
A RQFII fund allows qualified foreign investors to channel renminbi funds raised in Hong Kong to invest in mainland securities markets.
Recently restrictions saying the fund must invest primarily in renminbi bonds and bond funds and was only allowed 20% in China A-shares have been relaxed.
According to the South China Morning Post, the association was established in mid-July shortly after the China Securities Regulatory Commission announced plans to expand the RQFII to encompass additional players. These could possibly include asset manager from the UK, Taiwan and Singapore.
The extension of the scheme would reflect desire on the part of the mainland authorities to further open its financial services sector to foreign players.
Meanwhile, the reluctance of native asset management companies to allow the development shows protectionist tendencies.
The South China Morning Post said many Hong Kong-based mainland fund managers saw the expansion as a threat and the association they had founded was comprised of 23 members.
The RQFII was launched in December 2011 to allow a small number of Chinese asset managers to establish renminbi-denominated investment products in Hong Kong, for investment in the mainland. Restrictions were imposed from the outset, but the authorities have responded to enthusiasm for the scheme by widening it to include international banks and asset managers with a presence in Hong Kong.

Part of the Mark Allen Group.