China has recognised Australia as an approved investment destination under the Qualified Domestic Institutional Investor (QDII) scheme, Federal Treasurer Wayne Swan announced.
Following a bilateral agreement between the two countries, Australia has obtained status as an approved QDII investment destination by the China Banking Regulatory Commission (CBRC).
As a result the QDII scheme will allow Chinese banks, insurance firms and fund management companies to invest in the Australian financial services market.
This is a landmark announcement for the industry, Investment and Financial Services Association chief executive Richard Gilbert said.
The China Securities Regulatory Commission (CSRC) also recently confirmed that its existing memorandum with ASIC is sufficient for recognising Australia as an investment destination under CSRC-issued QDII regulations.
"Australia is now in the privileged position of having the necessary memorandums in place with two of the most important financial regulatory agencies in China," Gilbert said.
This agreement allows approved Chinese securities institutions to engage with Australian fund managers as well as invest in Australian-listed stocks and managed investment schemes registered by ASIC.
The funds management industry in China has grown significantly over the last decade. Funds under management (FUM) are projected to reach US $720 billion by the end of this year.
