China’s attempt to draw foreign investment into its lagging mainland stock market has failed to garner significant interest, with just one “qualified” foreign institutional investor committing to more capital injections despite an easing of regulation by the government.
According to China’s state foreign exchange regulator, the only foreign firm participating in the Qualified Foreign Institutional Investor (QFII) program to increase its exposure to Chinese markets was South Korean KB Asset Management Co., which agreed to add $1 billion after Beijing relaxed the program’s stringent and demanding regulations last month.
QFII was established to facilitate the entry of overseas institutional investors, including sovereign wealth funds and the world’s largest investment banks, into mainland markets. The QFII program now oversees $100.5 billion of foreign investment into mainland stocks, according to the South China Morning Post.
Of the 287 institutions currently enrolled in the program, however, 286 kept their positions on China unchanged, reflecting global uncertainty and skepticism towards mainland stocks amid a host of economic uncertainties including tariff threats and a looming economic slowdown.