Chinese crave U.S. investments

ملخص مفصل

The interest rate on a one-year yuan deposit in the Industrial and Commercial Bank is 0.95 per cent. For a one-year U.S. dollar deposit in Citibank, it is four per cent. The…

The interest rate on a one-year yuan deposit in the Industrial and Commercial Bank is 0.95 per cent. For a one-year U.S. dollar deposit in Citibank, it is four per cent.

The Shanghai Composite Share Index has risen 2.4 per cent since September 2025. The Standard & Poor Index has risen 34 per cent over the same period.

Is it any wonder that Chinese investors want to hold U.S. assets and not mainland ones?

But Beijing is facing a fall in national tax revenue. In 2025, China's fiscal revenue fell 1.7 per cent from a year earlier, the first contraction since 2020 due to a protracted property slump and weak domestic demand.

It wants its people to invest not abroad but in domestic assets and domestic industries, especially those it considers strategic.

So it has adopted a two-pronged strategy. In early September, it made a small increase of US$6.8 billion, to a record US$183 billion, in the total that can be invested through the Qualified Domestic Institutional Investor (QDII) scheme.

Introduced in April 2006, it allows approved banks, funds, trust companies, securities firms and insurance companies to invest abroad in equities, fixed income and derivatives in specified overseas markets, on behalf of themselves and retail investors. The U.S. is the top destination for China’s QDII funds, accounting for nearly half of the business.

The amount of money held by Chinese offshore is staggering. According to data from the Institute of International Finance (IIF), resident capital outflows from the mainland reached a record US$809 billion in 2025.

Much of that went to Hong Kong. Cross-border wealth booked in the city last year was US$2.95 trillion, up 10.7 per cent on 2024, the IIF said. From there, the money is invested around the world.

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