Setting up a foreign private equity fund in China

China's recent capital market reform

In April 2020, the Chinese government removed the limits on foreign ownership of fund management, securities, futures, life insurance, and currency brokerage firms. They implemented the decision one year earlier than it was initially scheduled. Previously, foreign financial firms could only obtain a minority stake in a Chinese joint venture. The joint venture prevents foreign firms from being overly involved in the Chinese financial system while allowing its partner firm to learn advanced financial know-hows. The State Administration of Foreign Exchange also removed Qualified Foreign Institutional Investors (QFII) and CNY Qualified Foreign Institutional Investors' (RQFII) investment quota. Since then, Chinese capital market's further opening has attracted many agile foreign investors.