Chinese investors are increasing their exposure to overseas assets, particularly US stock funds, after regulators expanded authorised channels for investing abroad, releasing pent-up demand as domestic returns remain weak.
The surge has emerged alongside a crackdown on unofficial routes for transferring money overseas. While Chinese authorities have targeted what they consider illegal overseas investment through online brokerages, they have also expanded formal programmes that allow investors to access international markets.
China’s foreign exchange regulator raised the outstanding quota under the Qualified Domestic Institutional Investor (QDII) programme by $6.8 billion late last month, taking the total to a record $183 billion.
The response from fund managers has highlighted the strength of demand. On September 9, the daily subscription limit for a QDII fund tracking the Nasdaq 100 was increased from 10 yuan to 5,000 yuan. One day later, Wanjia Asset Management cut the limit to 100 yuan per individual investor.
“It means there was explosive inflows so the fund manager needed to limit the subscriptions,” said Ivan Shi, head of research at fund consultancy Z-Ben Advisors. “There remains huge appetite in China for U.S. tech stocks.”
Other asset managers have made similar adjustments. China Universal Asset Management relaxed restrictions on its Nasdaq 100 exchange-traded fund before tightening them again two days later. TruValue Asset Management also reversed an earlier easing of restrictions on a QDII fund investing in global chip stocks.
The rush for overseas investments comes as confidence in China’s domestic economy remains fragile. China’s 10-year government bond yield is more than three percentage points below the yield on comparable US Treasuries, while Chinese equities have generally lagged the double-digit gains recorded by US stocks this year.
China’s balance of payments data showed that portfolio investment recorded a deficit of $426 billion in 2025. Net outflows reached $146 billion in the first quarter of this year, according to the data.
“Chinese demand for global asset allocation is getting bigger and bigger,” said Xu Jie, a fund manager at Yuanzi Investment Management, which invests in international markets through QDII-linked ETFs.
He said long-term investors need to diversify risks and participate in growth across major global markets.
The United States is the largest destination for QDII funds, accounting for nearly half of the approximately 1 trillion yuan ($150 billion) sector, according to Shanghai Securities.
Strong demand has also pushed some US-focused ETFs to significant premiums over their net asset values. A Shenzhen-listed ETF tracking the Nasdaq-100 Technology Sector Index traded at a premium of 24% on Wednesday.
“The premium just reflects strong household demand on global assets,” said Zhaopeng Xing, senior China strategist at ANZ.
Xing said China’s balance of payments had recently turned positive because of strong trade inflows, but regulators still face the challenge of balancing those inflows with efforts to control capital outflows.
