China Raises Limit on Overseas Asset Buys

The State Administration of Foreign Exchange in China increased the foreign-exchange quota for qualified domestic institutional investors (QDII) to USD 170.9 billion at the end of June from USD 167.8 billion.

This marks the first increase in the amount approved investors can allocate to overseas assets since May 2024, as authorities move to ease capital outflow controls.

The adjustment follows a weakening US dollar and slowing demand for overseas assets like US stocks, which have helped ease pressure on the yuan.

Under the QDII scheme, authorized Chinese institutions can invest in overseas securities, bonds, and commodities within specified limits.

Interest in foreign assets surged over the past two years amid a sluggish domestic equity market, leading to ETF pricing distortions as demand outstripped quota supply.

The latest expansion includes USD 2.1 billion for securities firms and fund houses, USD 660 million for banks, and USD 300 million for insurers.