China RQFII quota hits $77.2b

BEIJING - A total of 179 overseas institutions have received quotas amounting to 529.6 billion yuan ($77.2 billion) under the RMB Qualified Foreign Institutional Investors (RQFII) program, the State Administration of Foreign Exchange said Wednesday.

The RQFII program allows institutional investors with offshore renminbi deposits to invest in the domestic Chinese market.

China's currency, the yuan, is convertible for trade purposes under the current account, while the capital account, which covers portfolio investment and borrowing, is largely run by the state in an effort to control capital flow.

As of Jan 25, the quota in the Qualified Foreign Institutional Investors (QFII) program stood at $87.3 billion, maintaining the same level as the end of last year, according to the administration.

To gradually open the capital account, the government introduced the QFII and RQFII programs in 2003 and 2011, respectively. They give foreign investors the right to move money into the account, encouraging controlled flows.

The RQFII program is currently open to 18 countries and regions, including the Hong Kong Special Administrative Region, Britain, Singapore, France, the Republic of Korea, Germany, Qatar, Canada, Australia and Luxembourg.