China is set to indefinitely postpone the landmark Qualified Domestic
Institutional Investor (QDII) scheme that would have allowed mainland institutions to
exchange their RMB into hard currency and invest it in Hong Kong's capital markets,
according to a story in the Financial Times.
Securities Regulatory Commission (CSRC) opposed the scheme because of fears that it
would divert funds away from Shanghai's under-performing stock market and possibly
drive stock prices even lower.
The delay of the QDII
scheme rules out one of the options for China to increase flexibility of its exchange rate as it
faces increased pressure from the US and other countries to allow the RMB to