The Qfii Mechanism Of China's Capital Market And Listed Companies

QFII(Qualified Foreign Institutional Investors) is a mechanism that intends to make a limited tie between domestic un-fully-opened capital market and the fully-opened international capital market. It is widely adopted by the emerging capital market, such as Korea, India, and China Taiwan.Under QFII, the information transferring comes from two sides, one is international capital flow, and the other is restriction of domestic authorization.This article summarizes and concludes the procedure, functional and statistical characters of Korea, India, esp. China Taiwan, then analyze the specialty of QFIIs in China under a "gradually positive QFII pattern" market rule.Based on the above, this article then forecasts the coming forward effects QFIIs will bring to China capital market——in short term, QFII will not change China stock market dramatically, How ever in long terms, it will benefit the market in many aspects——QFIIs capital will remain net income status for a long time, which will lead the market develop healthily; QFIIs will import the mature and advanced investment methods and reasonability; stock price re-arranging effects with deeper utilizing the accounting information; the open-out of capital market will accelerate under the expectation of joining MSCI index system; the domestic market will be tied and affected with the international market more tightly; QFIIs will leads domestic finance service develop into a new high level.In short term, QFIIs will pay attention to domestic companies with such traits: in original industries with strong competition power, without B share or H share out offering, fully transparent information disclosure. The QFIIs' investment in China will be probing in short term because of the strict regulation on China foreign exchange authority. With time goes by, the QFII regulations in China will show more and more allowance and flexibility. Finally the article gives some suggestions to domestic listed companies under the market environment changed by QFII mechanism, including the aspects of information disclosure, value management, finance innovation, and strengthening the main business.