That last claim is pushing things. They could only have had a marginal role in influencing volatility. Other factors have been at work, such as better regulation. Nevertheless, China's stockmarket would gain that expertise and technology. And QFII would afford the country some portfolio capital experience while still maintaining control.
Foreign institutions are also, of course, keen on the scheme.
At the moment, they are mostly interested in setting up joint-venture fund management companies. Several agreements are in place, though none yet has the CSRC's nod. SSB's Charles Cheung expects a couple to be authorised in the second half of 2001. Funds come before QFII because there are fewer foreign exchange issues and Chinese firms retain control. Before they commit, foreign institutions will need a few guarantees.