BEIJING, Sept. 12 (Xinhuanet) -- In July, China almost doubled the quota of its Qualified Foreign Institutional Investor scheme - or QFII - hoping to lure more long-term international financial institutions to the Chinese market.

Even the best ideas need time to thrive and prosper.

It was on July 12 when China’s top securities watchdog, the China Securities Regulatory Commission, increased the investment limit for qualified foreign institutions to 150 billion US dollars, from a previous 80 billion.

The new quota comes as the QFII program is rapidly expanding this year, with the number of approved institutions increasing by 22 to a total of 229.

At this conference, participants agree that the move in July by the authorities will further open up the capital market and pave the way for deeper reforms. And the expectations are high for more to come.

Overseas investment through the QFII program only accounts for a tiny portion of China’s A-share stock market so far.

Accounting firm Marcum Bernstein & Pinchuk, organizer of the event, says the empty space will be filled soon.

"I have to say after ten years in operation, QFIIs are still very small in the Chinese market. As far as I know it only represents 1.6 percent of the huge market, so it’s not enough at all. I think it has to be improved very shortly."said Charles Yin, Managing director of Marcum Bernstein&Pinchuk LLP.

But is it that simple to convince international investors?

"I think the major concern is the credibility factor. You have seen the Chinese stocks discounted tremendously from other stocks, and you really have to ask yourself why is this happening right now."said Drew Bernstein, partner of Marcum Bernstein&Pinchuk LLP.

Deutsche Bank thinks the main concerns for foreign investors still remain taxation and repatriation issues.

"For the first one I know that the CSRC and SAFE have been working very hard with the tax authority to come up with clear rules for especially the QFII to apply, however the Ministry of Finance has different concerns, they would like to have broad rules to cover all foreign investors not just QFIIs. So I think we have to wait a little longer."said Vicky Tsai, head of direct securities services of Deutsche Bank China.

Investec Asset Management and UBS Global Asset Management are among the overseas institutional investors which have been granted licenses this year, allowing them to buy Chinese stocks and bonds.

But with China’s still high growth rate - the official target is set at 7.5 percent this year - the QFII quota will need a fresh injection to be able to keep up with this pace.

(Source: CNTV.cn)