Foreign institutional investors will soon have unlimited access to the Chinese bond and stock markets after authorities announced, on Tuesday, the end of a quota system which has been in place for nearly two decades.
The Qualified Foreign Institutional Investor QFII and Renminbi Qualified Foreign Institutional Investor RFQII schemes, implemented in 2002 and 2011 respectively, made Chinese-traded stocks globally accessible.
The programmes’ effectiveness, however, is debatable. China’s cross-border Stock Connect with Hong Kong launched in 2014 and the trading link has supplanted QFII and RFQII as a means for foreign investors to access Chinese markets.
In addition to cancelling the institutional investment limits,...