Changes to the Qualified Domestic Institutional Investor (QDII) program in China will free up some of the country’s $2.25 trillion in household savings to move to overseas markets, the International Herald Tribune reports.
QDII allows Chinese investors to place money in overseas investment funds, but next year, China will run a trial program to allow Chinese investors to buy overseas stocks listed on the Hong Kong exchange.
This should have a tremendous impact on foreign financial markets and, hopefully, offer a release valve for the Chinese stock market, which has risen five times in value since the beginning of last year. There are more than 120 million brokerage and 90 million mutual fund accounts in the nation.
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.