The State Administration of Foreign Exchange (SAFE) of China recently announced the latest approval of quotas for Qualified Domestic Institutional Investors (QDII), with a new quota of $5.3 billion (21.329 billion MYR), marking the largest increase since 2021. Foreign media described this as indicating that, amid the US-Iran war, China's domestic market and the RMB remain relatively stable, giving China room to further relax capital controls and expand the global influence of the RMB.
According to the latest QDII quota approval published on the SAFE's official website on the 27th, as of the end of March this year, the total approved quota had reached $176.169 billion (708.962 billion MYR), compared to $170.869 billion (687.633 billion MYR) at the end of February, representing an increase of $5.3 billion.
The QDII scheme allows eligible Chinese domestic institutional investors to purchase foreign securities, bonds, and commodities within a specified quota. In mid-March, SAFE Director Zhu Hexin had already indicated that a new batch of QDII investment quotas would be issued.
Bloomberg reported on the 30th that this is the first time since June 2025 that China has raised the QDII investment quota, and the increase is the largest since 2021.
The report quoted Becky Liu, Head of China Macro Strategy at Standard Chartered Bank, as saying that the new QDII investment quota from China was largely expected, as China has been planning to allow more flexibility for overseas investments to further open up the capital account.
Becky Liu stated that the timing and scale of the new QDII investment quota are very interesting, as the international market is facing high uncertainty, yet China is allowing greater outflows of capital, reflecting that, since the US-Iran war began, China has not seen significant capital outflow pressure and may even have seen capital inflows.
Other analysts believe that the increase in QDII quotas reflects the authorities' intention to promote more two-way cross-border capital flows and shows greater confidence among Chinese regulators in maintaining RMB stability.