China has issued another round of sizable quotas last month under the qualified domestic institutional investor (QDII) this year, according to the latest data from the State Administration of Foreign Exchange (SAFE).
Eleven firms became recipients of quotas amounting to $8.85bn. Bank wealth management subsidiaries receiving more than half of the quotas issued in March, with three of them each receiving $2bn.
Of the 11 firms, two are first-time recipients, including HZBANK Wealth Management and China Fortune Securities, SAFE data shows.
QDII quota recipients, March 2021
| Firm | Quota given on 18 March ($m) | Total quota as of 18 March ($m) | Firm type |
| BOC Wealth Management | 2000 | 3000 | Bank’s wealth management subsidary |
| ICBC Wealth Management | 2000 | 2800 | Bank’s wealth management subsidary |
| CMB Wealth Management | 2000 | 2300 | Bank’s wealth management subsidary |
| HZBANK Wealth Management (first-time recipient) | 100 | 100 | Bank’s wealth management subsidary |
| Hua An Fund Management | 500 | 2050 | Fund management company |
| Shanghai Guotai Junan Securities Asset Management | 500 | 1150 | Fund management company |
| Invesco Great Wall Fund Management | 500 | 1150 | Fund management company |
| CCB Principal Asset Management | 500 | 1050 | Fund management company |
| Tianhong Asset Management | 500 | 900 | Fund management company |
| Everbright Securities Asset Management | 200 | 500 | Fund management company |
| China Fortune Securities (first-time recipient) | 50 | 50 | Securities company |
This is the second time that SAFE issued QDII quotas in 2021, following the $9.02 worth of issuance to 21 firms in January. This brings an issuance of $17.87bn so far this year, exceeding the $12.72bn amount given in 2020.
China has been aggressive in granting fresh QDII quotas since it announced its plans of dishing out more quotas last year. Before the QDII issuances in 2020, the last time the regulator issued quotas was in April 2019.
“China has been speeding up on opening its financial markets,” Kean Yung Siau, Singapore-based analyst at Cerulli Associates, told FSA.
“The relatively weaker US dollar against the renminbi could also be one reason why there are more QDII quotas issued recently, as in such circumstances, capital outflows via QDII quotas won’t deteriorate the value of RMB currency much to make the regulators feel safe.
“In addition, QDII quotas were also given to bank wealth management subsidiaries to allow them to launch some overseas investment products, would allow their clients to gain exposure to offshore investments,” he added.
Since the programme began in 2006, SAFE has granted $134.6bn in QDII quotas to 173 licence holders, with Ping An Insurance Group having the largest quota of $7.59bn, followed by Sino Life Insurance ($4.41bn), Harvest Fund Management ($4.1bn), China Asset Management ($3.85bn), and E Fund Management ($3.85bn).
