They've been, they've seen and time will tell whether they've really conquered. Meantime, given the way that China does business one thing is for sure: If the TMX Markets Group hadn't gone to China on its recently completed trading initiative, less would have happened.

The trip, the first official visit by TMX Markets Group, had a straightforward objective: to promote trading in TSX and TSX Venture-listed securities, including stocks, ETFs and structured products, to Qualified Domestic Institutional Investors, entities that have been set up in China to make portfolio investments in offshore markets. The idea was to "leverage the TMX's trading expertise and dominant position in resource-based equities to attract new investment and trading activity to the Canadian markets."

So the team made speeches, presentations to investment houses and, like a good salesman, asked for the order when it was all over.

"We just flat-out asked, how much do you see of your allocation invested in Canada," said Robert Fotheringham, a senior vice-president of trading at the TMX Group. "We got a variety of answers, from 5% to 15% to 18%." If those percentages materialize, then Canada will punch above its weight.

Fotheringham, who was making his third trip to China in less than a year, said investors will award Canada a higher allocation because of the strength of the currency and its natural resources.

"That was the door opener," he said. But the Chinese investors were also interested in index funds, notably the i60 shares, an ETF about to celebrate its 20th anniversary early next month. "There was great interest in ETFs."

But to be able to make those offshore investments each QDII -- in effect a fund manager that could be set up by a bank, an insurance company, a pension fund or a securities firm with capital coming mostly from institutional investors -- has to be approved by the government.

"China wants to integrate its investments globally and the regulators are extremely careful about allowing that flow [of investments outside of China]" added Stan Grunzeweigg, a director in the TMX's international capital markets group. "They are the only legal way to get money out of the country," he said.

And it takes some time for each QDII to become operational. They have been around for about four years but until early last year, only 40 had been formed. (The first QDII's were confined to investing in fixed-income securities.) Over the past year that number has doubled to 75 with double that number waiting for approval by the Chinese Securities Regulatory Commission. Each QDII varies in size with at least one having US$5-billion in potential firepower. Grunzeweigg said an average fund would have about US$250-million to invest.

bcritchley@nationalpost.com