The Overseas Securities Investment Promotion Subsystem
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Overseas securities investment is an important part of China’s outbound investment strategy. It is very significant for three reasons. First, due to the fast growth of the Chinese economy and an increasing amount of foreign exchange reserves, China has a strong material foundation for outbound investment. The need to maintain and increase the value of China’s foreign currency assets has become the internal driving force for making outbound investment. Second, overseas securities investment and capital operations will both become necessary for the success of China’s ongoing transformation. Third, overseas securities investment is a good supplement to the few investment approaches in China, as it provides domestic investors with an effective way of reducing investment risks. The Chinese government should build the overseas securities investment subsystem around improving the Qualified Domestic Institutional Investor (QDII) system and standardizing Sovereign Wealth Funds (SWFs).