China’s fund management industry is gaining international attention as the country opens up its capital markets and allows more offshore renminbi – or CNH – to flow back to mainland China.
A pool of offshore liquidity has been building in Hong Kong in the first stage of making the renminbi an international currency that will one day be easily converted as the US dollar. But until recently, not much could be done with the CNH deposits sitting in Hong Kong’s banks. That, however, has begun to change with the introduction of the Renminbi Qualified Foreign Institutional Investor (RQFII) scheme, which has opened up a channel for foreign investors to use offshore renminbi to invest in China’s stock markets.
