QFIIs

QFII stands for Qualified Foreign Institutional Investor. It is a program designed by Chinese regulators to allow approved foreign institutional investors to access mainland China's onshore securities markets, primarily through a quota-based system. The program began in the early 2000s, with a 2002 policy announcement and a 2003 rollout, as part of China’s broader effort to open its financial markets to foreign participation.

Eligible participants are regulated financial institutions established outside China with a proven track record and meeting minimum asset requirements. They apply to the relevant Chinese authorities for a QFII license and a quota, denominated in foreign currency (typically US dollars). Once approved, they can invest in designated onshore securities such as A-share equities and local bonds, subject to daily limits, reporting duties, and repatriation rules; use of the funds is monitored by SAFE and other regulators.

Over time, the QFII framework has evolved alongside other cross-border access schemes. Renminbi QFII (RQFII) permits offshore RMB-denominated investments, and stock-connect programs linking Shanghai and Shenzhen with Hong Kong broaden access beyond the traditional quotas. Regulators periodically adjust eligibility, quotas, and permitted instruments as part of market opening and risk management.

The program aims to improve liquidity, price discovery, and market depth in China’s onshore markets, while granting foreign investors regulated access to a large and growing universe of Chinese securities. It remains one of several tools used to integrate China’s capital markets with global financial systems, with ongoing reforms influencing its use.