The Chinese yuan, also known as the renminbi, is already convertible under the current account - the broadest measure of trade in goods and services. However, the capital account, which covers portfolio investment and borrowing, is still closely managed by Beijing because of worries about abrupt capital flows.

The QDLP scheme, designed for foreign hedge funds, complements the qualified foreign limited partner system Shanghai launched in 2011. Photo: Bloomberg

Foreign hedge funds set to get yuan fundraising toehold

Shanghai has started the countdown to the introduction of a "qualified domestic limited partner" (QDLP) scheme, which will allow foreign hedge funds to raise yuan capital on the mainland to make investments in overseas securities.