An Research On The Development Of China's QDII(Qualified Domestic Institutional Investors) System

With the liberalizaion of our current account, China's capital account was still under restrict control in 2006, after China's entry into the WTO five years ago. Under the background of the international capital flow liberalization, it is becoming more and more necessary for China to further the process of capital account liberalizaion, in order to promote its fast economic growth and the economic globalization as well.However, the capital account liberalization is a greatly risky reform. As a developing country, China's process of liberalization should be realized step by step instead of imediately, which is mainly because of the imperfectness of the domestic capital market, and the pity of low international competitive power of domestic institutions. Therefore, it is of great feasibility to utilize a gradual process. In terms of all these, QFII and QDII are the best choices. On Dec. 1st, 2002, China started to put the QFII System into practice, with its counterpart, the QDII system, catching researchers' attention. It was not until Apr. 13th, 2006 that the People's Bank of China officially announced the implementation of the QDII System with its Document "Wu Hao Gong Gao".Looking back on the two years' development of the QDII System, the thesis starts with QDII's present situation in China. Then it moves on to analyze the main obstacles encounted by the three key practitioners(ie. the government, the institutional investors and the personal investors)in great details to explain the reason why QDII Products' yields are so depressing. And finally, the thesis puts forward some instructive suggestions to the three key practitioners involved, with the successful practices of QDII from other nations and areas around the world as a reference.As the QDII System is still a pilot project in China, all thesis in respect of QDII place a special emphasis on its feasibility and its impact on the stock market, while the researches, which combine the successful experiences from other nations and areas around the world, on the strategies of QDII's development, are poor. This also explains the innovation of my thesis. With the wide spreading of the "Subprime Mortgage Crisis" all over the world, it is now of great importance for the defferent key practitioners to manage their overseas portfolio, in order to optimize QDII Products' yields.