The Analysis Of Barrier And Countermeasure Of QFII System About The Implementation Of Stock Market In China

In the background of the global economy Integration and entering WTO, It allows no delay to open up our stock market. Since "Qualified Foreign Institutional Investors regulating Measures in Domestic Securities Investment" was issued at the end of 2002, China Securities industry has entered a gradual process of opening up to foreign investment markets. In the research of history of many developing countries, we can see that the emerging countries have adopted a gradual opening up model, which typical is the Qualified Foreign Institutional Investors (QFII) system. Some experience of emerging markets (Taiwan, Korea, etc) has shown that QFII is the most reliable and viable model of gradually opening up the securities market.Based on the analysis of South Korea in early 80's and Taiwan in 90's since the 20th century ,we find that the implementation of QFII has many benefits after they were introduced as well as stabilizing securities markets, regulating listing company and improving its governance structure, establishing a stable long-term investment philosophy and changing the structure of investors. But after comparing the effect of the implementation of QFII between securities market in China and emerging countries or regions, we find that the introduction of QFII has not played a effective role as we expected. Weakness in our own stock market hindered the effect of QFII .In this paper, to an in-depth analysis, we propose policy recommendations in order to eliminate the barrier to implement QFII in our China's stock market.