China to allow individuals to invest overseas directly

BEIJING - China will reportedly start a QDII2 (Qualified Domestic Individual Investor trial programme in six selected cities soon, allowing Chinese residents to invest directly overseas in its latest step to deregulate its capital markets and to liberalise capital outflow.

This is China’s second iteration of a scheme in which the first version was limited to financial institutions. This new scheme will initially be launched in Shanghai, Tianjin, Chongqing, Wuhan, Shenzhen and Wenzhou.
Individuals with at least RMB1 million (US$160,000) in financial assets can apply, indicating that China may soon relax its foreign exchange quota (currently at US$50,000) for onshore residents, according to ANZ Bank.
Under QDII2, Chinese residents will be allowed to invest into a wide range of overseas assets, including bonds, stocks, funds, FX, derivatives, real estate and industrial companies.
Individuals will need to open specific accounts with banks for related transactions. However, non-financial market investment, such as property, will need to obtain approval from domestic regulators.  www.live.anz.com (ATI).