Despite Beijing’s recent tightening of regulations on overseas portfolio investments and tax compliance, demand from mainland Chinese investors for legitimate cross-border investment opportunities remains strong, according to China International Capital Corporation (CICC).

Speaking at an event in Hong Kong on Thursday, Qiao Bo, managing director and head of investment products and solutions at CICC, described the current appetite for global diversification among mainland clients as “robust.” He emphasized that including overseas assets is increasingly viewed as essential for reducing overall portfolio volatility. However, Qiao also cautioned that the long-term effects of the regulatory clampdown would require ongoing monitoring.

In recent weeks, Chinese authorities have intensified controls over cross-border investment activities, targeting entities that assist mainland investors in circumventing capital controls and investing abroad. The latest policy, announced on Wednesday, imposes personal income taxes on offshore trusts—a measure aimed at closing a loophole frequently used by wealthy families to reduce their tax burden.

While these measures have raised concerns among financial players in Hong Kong, CICC remains optimistic about the city’s continued role as a hub for fund management. Qingchuan Liu, CICC’s managing director and head of asset custody services, highlighted confidence in the firm’s asset management business, projecting double-digit annual growth. Liu attributed this outlook to a favorable long-term perspective on Chinese asset managers expanding globally and the strengthening of cross-border capital flows between mainland China and Hong Kong.

CICC data shows a rising number of mainland asset managers establishing Hong Kong as their primary base for international expansion. During the first half of this year, CICC was the largest sponsor of initial public offerings in Hong Kong. The firm noted a shift from an earlier phase of “strategic overseas trials,” characterized mainly by single product launches, toward more comprehensive “globalized operations.” This new phase involves building larger teams, setting up multiple entities, securing various licenses, and offering multicurrency investment products.

Currently, more than 130 mainland private equity firms hold a “type 9” license in Hong Kong, authorizing them to act as asset managers in the city. This trend reflects growing demand from Chinese entrepreneurs as they expand overseas industries, driving substantial requirements for US dollar-denominated asset management and allocation services.

Overall, while Beijing’s recent regulatory moves signal a tighter environment for cross-border investments, mainland investors and asset managers continue to see Hong Kong as a vital platform for global investment strategies.