After grinding to a standstill, China's QDII exchange-traded fund market has shown a few signs of life this year, in the form of new product launches. One issue is that the authorities are more circumspect than they had been previously about driving things forward.

In a departure from his earlier aggressive tone, Zhang Yujun, general manager of the Shanghai Stock Exchange, has become more cautious about publicly discussing developments in the QDII ETF market.

And Yao Gang, vice-chairman of the China Securities Regulatory Commission, has cited several embarrassing incidents seen in domestic ETFs over the past year. He says the regulator would prefer not to see China's ETF platform being expanded to include offshore offerings, until basic issues -- such as frequent index miscalculation or portfolio trading mistakes -- have been ironed out.

Among Chinese fund managers keen on seizing assets in the market for passive offshore offerings, more are now opting for the 'index funds' route. In China, index funds are mutual funds that replicate index performance, but without the structuring required for ETFs.

Shanghai-based Guotai Fund Management was the first to head down this path. By opting for the index fund structure over the ETF structure, Guotai was able to launch its offering tied to the Nasdaq 100.

The firm ended its fund IPO period on April 23. The fundraising result was not stellar, hitting Rmb556 million ($81 million). Nonetheless, there are advantages to being one of the first three managers to come back to the QDII market, before dozens still in the QDII queue get to dump their numerous offerings and soak up demand.

Now Shenzhen-based China Southern Fund Management wants to be the next in line, having recently secured approval from the regulator for an upcoming index fund launch. The offering will be tied to the FTSE Bric 50 index and will be the firm's fifth index-fund offering to date, out of a 23-strong product range. (Southern was the first fund house to meet the requirements to launch an official QDII fund or QDII segregated account.)

The FTSE Bric 50 index tracks the performance of the 50 biggest companies by full market capitalisation that trade as either depositary receipts for Brazilian, Indian or Russian companies, or H-shares of Chinese companies.

As the underlying securities are all traded in large offshore markets, this frees investors from the fuss of onshore investing. For example, Like China, India imposes strict foreign capital controls, while Russian liquidity or turnover might be a concern for foreign investors.

Furthermore, a Bric-themed fund will no doubt be sexier than many of the other global equities-heavy QDII offerings on Chinese product shelves. That's where the biggest GDP growth is expected to be, and Chinese investors know their 'Brics'. (Kudos to Jim O'Neill.)

Southern's Bric offering is likely to arrive in the market before the firm's long-anticipated S&P 500 QDII ETF, which it had planned in conjunction with the Shenzhen Stock Exchange and index provider Standard & Poor's.

Huang Liang -- who has been with Southern since May 2009 and is one of the few portfolio managers of Southern's first QDII fund -- will manage the Bric 50 portfolio.

The Southern deal also marks another success for FTSE International. It is the second of such deals it has lined up with Chinese asset managers, after its March agreement to give Shanghai-based Hua An Fund Management exclusive use of its FTSE 100 index for the development of an ETF in China.

Things have indeed been looking up for the UK index provider since it made peace with the Shanghai Stock Exchange earlier this year -- after its dragged-out spat over whether FTSE had infringed the SSE's rights by helping creating an A-share futures market in Singapore back in 2005, before China ever had one.