Overview

China has launched a pilot program which allows Chinese yuan raised by Hong Kong subsidiaries of Chinese domestic fund management companies and securities companies to be invested in China's domestic securities markets.

This program represents another step for China to achieve its long-term goal to increase the attractiveness of the yuan as an international currency. It comes at a time when foreign exchange is reportedly flowing out of mainland China, and it may help to offset recent capital outflows and to ease tightening liquidity in mainland stock markets.

In this briefing, Bingham McCutchen outline the program's expected effect and the qualifications an applicant would need to meet in order to become an RMB Qualified Foreign Institutional Investor.

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