Zhuhai has become the country's first prefecture-level city authorized to allow foreign asset managers to raise RMB for overseas investment by wealthy and institutional investors in China. The privilege was also extended to the Guangdong-Macao In-Depth Cooperation Zone in Hengqin and provincial-level city Guangzhou due to strong supervisory capabilities.

The Qualified Domestic Investment Partnership (QDLP) is a pilot program operating in Tier 1 Shanghai and Tianjin and started in Guangdong in sub-provincial Shenzhen. Soon all of Guangdong Province will be able to carry out pilot projects for qualified domestic limited partner overseas investment.

Press conference [Photo courtesy Nanfang Plus]

Interim Management Methods of Experimental Operation of QDLP in Guangdong Province took effect Oct 29. The province takes the lead countrywide to delegate such authority to lower-level financial supervisory authorities, it was announced at a Nov 2 press conference of the Guangdong Information Office.

Finance bureaus of Zhuhai and the Hengqin Cooperation Zone may now accept applications from management companies and funds within their jurisdiction. The authorities will examine the applications with other units of the municipal or zone's joint conference while consulting with the provincial joint conference before granting eligibility and setting limitations.

The QDLP pilot expands the overseas investment scope and improves asset allocation efficiency, contributing to the formation of "dual-circulation" in which Chinese and foreign markets complement and reinforce each other with the domestic market as the mainstay, a Zhuhai Finance Bureau official said. This also results in a new passage for cross-border capital flow and the interconnection of financial markets in the Guangdong-Hong Kong-Macao Greater Bay Area. 

In anticipation of the policy, Hengqin has carried out matchmaking with several interested companies and reserved multiple QDLP projects with proposed quota of over $1 billion, according to the zone's Finance Bureau. The quota for the QDLP pilot is $5 billion to enable global asset managers to market overseas funds more effectively to Chinese investors.