Chinese investors are increasing allocations to foreign assets, particularly U.S. stock funds, after China’s foreign exchange regulator raised the outstanding Qualified Domestic Institutional Investor (QDII) quota by $6.8 billion to a record $183 billion. The expansion of authorized overseas investment channels has unleashed pent-up demand rather than eased access. Fund managers have repeatedly raised and restored subscription limits on products tracking the Nasdaq-100 and global semiconductor stocks. A Shenzhen-listed ETF tracking the Nasdaq-100 Technology Sector Index traded at a premium of about 24% to its net asset value, while the China Merchants Nasdaq-100 ETF recently traded at a premium of nearly 10%. The United States accounts for nearly half of the roughly 1 trillion yuan ($150 billion) QDII business. Demand has also spread to global funds available through China’s Mutual Recognition of Funds scheme, including Pictet’s Strategic Income Fund, which reached $5.1 billion in 2026, with about 60% of assets from mainland Chinese retail investors. The shift reflects a wide yield and performance gap: China’s 10-year government bond yield is more than three percentage points below U.S. Treasury yields, while Chinese equities have broadly lagged U.S. stocks’ double-digit gains. China’s portfolio investment deficit reached $426 billion in 2025, followed by $146 billion of net outflows in the first quarter of 2026.