Though China’s equity markets have been delivering scorching returns (160 per cent in 2007), locals clearly wanted to partake in the larger Asian growth story — the CIFM fund is to be invested in South Korea (commenced last month), Hong Kong, India and Singapore, among other markets.

Though China’s foreign exchange authority has only allowed investments of $19.5 billion by overseas funds set up by players like CIFM for now, the investment quota is expected to go up to as much as $70 billion in 2008.

The Qualified Domestic Institutional Investors (QDII) scheme, launched in 2006 to ease the appreciation pressure on the Yuan due to surging forex reserves, originally allowed investments by locals in Hong Kong securities. But it has been opened up further in recent months — apart from Asian markets, these funds can now also invest in securities of British and US corporations (an agreement was reached late December), even as efforts are on to tap the capital markets of Germany and Japan.