Analysis Of China's QdⅡ Situation And Research On Its Development

Qualified Domestic Institutional Investor (QDII) system, on the background of capital item not yet opened ,which is the system that the domestic finance investment institutions are permitted to invest in the foreign capital market, is a feasible approach to optimize the asset allocation in the securities business using the foreign capital market. In the 1990's, some emerging markets opened their securities markets by QDII.As China is in transition economy of the system environment for a long period of time, China's interest rates, exchange rates and capital account were strictly controlled. Under this system, interest rates and exchange rates lack of the price elasticity. China's economic development accelerated in recent years, the international balance of payments surplus continued, resulting in the accelerated growth of foreign exchange reserve accumulation. At the same time, domestic investors want to configure the assets on a global scale to diversify the risk of a single market, foreign exchange assets, increasing investment demand. Based on the experience from these markets and further research, China put the QDII system into practice in current form in April,2006.So far, it has gone through more than three year. QDII reflected its important role, but there were also some problems. This paper will have these issues further analyzed. In this paper, the scope of the study include:explain the connotation of QDII system, and presents the background of QDII system and the importance of QDII, analyze the current situation QDII and the problem emerging, forward some suggestions on the basis of the above analysis.