The rush has intensified after China’s foreign exchange regulator expanded the amount institutional investors are permitted to deploy abroad, releasing some of the pent-up demand for global assets.
At the same time, Beijing has been tightening its crackdown on unofficial channels used to move money overseas, including overseas investment through online brokerages. The combination of stricter controls on informal routes and expanded access through authorised investment schemes is pushing more investors towards regulated avenues.
The scale of demand became apparent within days of the latest quota increase.
Late last month, China’s foreign exchange regulator increased the outstanding quota under the Qualified Domestic Institutional Investor, or QDII, programme by $6.8 billion to a record $183 billion.
QDII schemes allow approved Chinese institutions to invest in overseas markets, providing domestic investors with a regulated route to international assets.
One Nasdaq-100 fund provided a striking example of the appetite.
On September 9, the daily subscription limit for individual investors in the fund was increased from just 10 yuan to 5,000 yuan. Within 24 hours, however, Wanjia Asset Management, the fund manager, sharply reduced the limit again, restricting individual daily inflows to 100 yuan.
The rapid reversal suggested that demand had quickly overwhelmed the additional capacity.
“It means there was explosive inflows so the fund manager needed to limit the subscriptions,” said Ivan Shi, head of research at fund consultancy Z-Ben Advisors.
He added: “There remains huge appetite in China for U.S. tech stocks.”
Domestic returns drive overseas search
The growing interest in foreign assets reflects a combination of weak domestic yields, subdued investor confidence and the strong performance of U.S. equities.
China’s 10-year government bond yield is more than three percentage points below the yield on comparable U.S. Treasury securities, making overseas fixed-income assets more attractive to investors seeking higher returns.
Chinese equities have also broadly lagged the double-digit gains recorded by U.S. stocks this year, further encouraging investors to look beyond the mainland market.
The result has been a significant increase in portfolio capital leaving China.
Balance of Payments data showed that China recorded a record $426 billion deficit in portfolio investment in 2025. Net outflows reached another $146 billion in the first quarter of this year.
The trend presents a difficult balancing act for Beijing. While authorities have sought to prevent disorderly capital flight and restrict what they regard as illegal overseas investment, demand for international diversification continues to grow.
Funds repeatedly tighten access
Several fund managers have responded to the surge by imposing or reinstating restrictions on subscriptions.
China Universal Asset Management recently relaxed restrictions on its Nasdaq-100 exchange-traded fund, only to tighten them again two days later.
TruValue Asset Management made a similar reversal on a QDII fund investing in global semiconductor stocks.
The repeated restrictions highlight the limited supply of authorised overseas investment opportunities relative to the demand among Chinese households and institutional investors.
“Chinese demand for global asset allocation is getting bigger and bigger,” said Xu Jie, a fund manager at Yuanzi Investment Management, which invests in international markets through exchange-traded funds under the QDII programme.
For investors with longer time horizons, he said, the motivation was increasingly about spreading exposure across markets.
“Long-term investors need to diversify risks and share growth in major global markets.”
U.S. remains the preferred destination
The United States has emerged as the leading destination for QDII investment, accounting for nearly half of the roughly 1 trillion yuan ($150 billion) business, according to Shanghai Securities.
Demand has become so strong that some U.S.-focused ETFs listed in China are trading substantially above the value of the assets they hold.
A Shenzhen-listed ETF tracking the Nasdaq-100 Technology Sector Index was trading at a premium of 24% on Wednesday, reflecting investors' willingness to pay more for access to a limited pool of overseas exposure.
“The premium just reflects strong household demand on global assets,” said Zhaopeng Xing, senior China strategist at ANZ.
The surge comes even as China's overall balance of payments has recently moved into positive territory, helped by strong trade inflows.
But the improvement has not eliminated concerns about capital leaving the country through portfolio investment.
“The regulators still need a balance to control outflows,” Xing said.
For Beijing, the challenge is therefore becoming increasingly delicate: provide Chinese investors with legitimate access to global markets while preventing a disorderly exodus of domestic capital.
The latest wave of demand for U.S. technology stocks suggests that, where authorised channels are available, Chinese investors are eager to put more of their money to work overseas.