New Infographic: Capital Flow Schemes

China's capital account has been highly controlled and regulated by Beijing.  Over the last decade, China has started a growing number of schemes to open the country to foreign investment and allow citizens to invest savings overseas.

Schemes officially allowing investment capital in and out of the mainland include: QDII, QFII, RQFII, Shanghai-HK connection, and will be expanded to QDII2 and a Shenzhen-HK connection soon.  Capital account liberalization is happening at a rapid pace but has a long way to go.

The potential for Chinese overseas investment is massive.  China bank deposits now stand at $21 trillion USD, double the size of China's GDP.  That massive savings will have implications for the investment world as money flows out of the mainland.  In the US for example, Chinese citizens have recently replaced Canadians as the largest foreign investors in the housing market.

The success of recent investment programs, like the Shanghai/Hong Kong stock exchange connection, has illustrated the potential for investment inflows into the mainland from overseas investors.

The new infographic below explains the details of each of China's investment inflow/outflow official programs.