China should broaden market opening to long-term investors, ex-PBOC official says

排行榜 2025年10月20日 21:55 3 admin

by YANG Zhijin

China should replace its quota-controlled, channel-based system for cross-border investment with wider market access for long-term institutional investors, former People's Bank of China (PBOC) vice governor HU Xiaolian said, calling the change essential for renminbi internationalization and for strengthening Shanghai as a global financial hub.

Speaking at the Global Asset Management Forum · 2025 Shanghai Suhewan Conference on Oct. 19, Hu called for a shift to a "modular", or sector-based, opening that would let vetted foreign central banks, sovereign wealth funds and other long-term investors operate more freely across China's equity, bond and derivatives markets. She noted that while access channels exist, they remain narrow and difficult for foreign institutions to navigate in practice.

China's existing "pipeline" model — built on schemes such as QFII, QDII and Stock and Bond Connect — was designed for a partially convertible capital account. It channels cross-border investment through narrow, quota-based routes with strict approvals. Hu said the aim is not only to let foreign institutions in, but to ensure they can truly operate renminbi businesses once they are in the market.

Hu also proposed building an offshore renminbi system in Shanghai, with freer flows of lawful capital, support for global treasury operations of Chinese companies, and pilot zones for digital finance and cross-border data use, while keeping clear onshore–offshore risk boundaries.

Her remarks accompanied the release of the Shanghai International Financial Center Development Report, which said the city has largely met its initial targets but still trails in market balance, global influence and high-end financial services. Hu called for reforms in market access, fintech and financial infrastructure.

Other officials at the forum backed the push. JIN Penghui, director of the PBOC Shanghai Head Office, said a strong currency and a strong financial center are "mutually reinforcing". Former Executive Vice Mayor of Shanghai TU Guangshao added that Shanghai "should not copy New York or London, but build its own model based on China's conditions."