Since the QDII (qualified domestic institutional investor) plan launching last July, it has not been very popular in its test market, Hong Kong.

The QDII plan will allow Chinese citizens to invest in overseas equities markets with designated foreign currencies. QDII works through qualified institutional investors such as fund management companies.

A quota of $12.6 billion has been allotted for the operation, but only $300 million, or 2.4 percent, has been utilized. Obviously, when the domestic stock market is like a crazy bull and nobody cares about risks, who will bother with the seemingly low yielding overseas market.

But things may be about to change. The number of players in China's stock market is now rapidly approaching 100 million, and the banks are still flooded with liquidity. The bubble is about to burst, and decision-makers have to do something fast.

QDII is an obvious candidate on the short list of possible measures. If successful, it has the advantage of killing three birds at the same time: curbing the surplus of savings and foreign exchange and cooling the yuan-denominated A-share stock market.

Another advantage, the plan is already in place. The machinery is now moving smoothly along after a year's experience in establishing, operating and refining the system.

This will be the fastest measure to be implemented since all it takes is some relaxation fine tuning. It is also safer because it is highly regulated and orderly. Any possible troubles will take place in Hong Kong, where there is a firewall separating the mainland.

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