Is China Getting Desperate to Prop Up Their Economy?
China looks like it wants to get ahead of any possible economic slowdown, catapulting off of strong export numbers and granting a record foreign investment quota of $2.75 billion in October.
China’s Qualified Foreign Institutional Investor system curates all foreign investment in the country. Prior to 2002, the country’s control on capital prevented investors to trade on China’s exchanges. The introduction of the QFII system allowed qualified investors to trade on Chinese exchanges within a certain quota. The quotas granted for the last few years have been modest, usually coming in at under a billion dollars in any given quarter.
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However, as of April 2012, the combined quota was $80 billion. The investment quota and the rate of licenses issued jumped in 2012, and the so far the third quarter shows the highest quota awarded to date. Quotas of over $2.5 billion were granted in both the first and second quarter of 2012 as well, setting the previous record.