QDII quota expanded to push financial opening-up

China has expanded quotas under the Qualified Domestic Institutional Investor (QDII) program to meet surging demand for overseas asset allocation, a move experts said underscores the country's firm resolve to financial opening-up despite recent global market turmoil.

Data released by the State Administration of Foreign Exchange on Friday showed that 78 qualified financial institutions were granted a combined $5.3 billion in new QDII quotas. The move marks the first such expansion since June and a notable increase from the $3.08 billion allocated at that time.

The QDII scheme allows domestic investors to access overseas equity and bond markets under a specific quota, serving as a key channel for outbound portfolio flows as China's capital account is not fully liberalized yet.

"The latest quota expansion suggests that China is continuing to pursue a gradual, demand-driven approach to capital account opening-up, balancing market needs with risk management," said Lou Feipeng, a researcher at Postal Savings Bank of China.

Lou said the move is partially aimed at meeting Chinese investors' strong and sustained demand for global asset diversification, which will help ease structural imbalances in the domestic fund market.

In recent months, some exchange-traded QDII funds suspended subscriptions as their QDII quotas were used up, pushing their secondary-market prices to sustained premiums over net asset value. This has been particularly pronounced for funds tracking popular overseas assets such as energy and US equities.

The latest quota injection is expected to alleviate these distortions. Several QDII funds relaxed subscription limits on Tuesday, and market participants anticipate that premiums will gradually narrow as supply improves.

The expansion, coming amid heightened global market volatility, also reflects confidence in the resilience of domestic financial conditions and the renminbi, analysts said.

The yuan has remained relatively stable against the US dollar this year, trading near the 6.91 level on both the onshore and offshore markets on Tuesday. Analysts said this provides room for a moderate increase in outbound investment quotas without exerting undue pressure on exchange rates.

At the same time, the move may support the broader international use of the RMB by facilitating more balanced two-way capital flows. "It demonstrates policy consistency and may open more space for expanding the global influence of the RMB," Lou said.

Addressing the recent China Development Forum 2026, Zhu Hexin, head of SAFE, said China will improve the coherence between capital account opening with economic and financial reforms as well as RMB internationalization.

The allocation structure of the new QDII quotas also highlights a policy tilt toward channels with higher transparency and broader retail access, analysts added.

Securities firms and fund management companies received $2.99 billion, accounting for more than half of the newly approved quotas. Banks and insurers were granted $990 million and $1.32 billion, respectively. No new quotas were assigned to trust institutions.

Following Friday's quota expansion, the country's total QDII quota came in at $176.2 billion.

According to CITIC Securities, fund managers are likely to tilt QDII quota usage toward publicly offered fund products.

Assets of publicly-offered QDII funds reached 1.03 trillion yuan ($149.2 billion) by the end of February, according to the Asset Management Association of China.