China to further bolster QFLP pilot programs

Updated: August 17, 2023 Source: Belt and Road Portal
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China proposed in a set of recently-released measures to foster qualified foreign limited partnership (QFLP) pilot programs to further expand the channels for attracting foreign investment, reported Securities Daily on Tuesday.

The State Council, the Chinese cabinet, said in its August 13-publicized guiding opinions on optimizing foreign investment environment and cranking up efforts for attracting foreign environment to establish and enrich QFLP foreign exchange management facilitation rules and support direct investment in related domestic programs with overseas Renminbi (RMB) raised under QFLPs.

Generally, QFLP system refers to schemes allowing overseas institutional investors to convert, after obtaining qualification approval and passing other forex funds supervision procedures, their overseas capital into RMB funds to invest in private equities or venture capital market in China.

Chang Chunlin, founder of Beijing Liwu Capital Investment Co., Ltd. told the newspaper that QFLP schemes provide overseas investors with more convenient channels to participate in investment in China.

Comprehensive implementation of the QFLP pilot rules will have positive impact on industries with high business morale and growth prospects such as high-end equipment manufacturing, artificial intelligence and new energy sectors.

By driving companies of these sectors to deepen global cooperation, adapt to international competition and cultivate new advantages, the move is likely to inject new impetus into the high-quality development of China's economy, added Chang.

Since 2011 when Shanghai launched the first QFLP pilot program, many places including Beijing, Tianjin, Chongqing, and Guangzhou implemented similar QFLP pilot policies to boost foreign investment.

Currently, QFLP pilot policies usually include simplified forex management procedures, looser foreign investment entrance restriction, and preferential tax policies, noted Chang, suggesting at the same time further simplification of approving procedures and forex registration procedures and gradual widening of investment targets to attract more foreign investors in future. (Edited by Duan Jing,  

Editor: Yu Huichen