China Approves Hong Kong Monetary Authority to Buy Chinese Securities

"...China has approved Hong Kong Monetary Authority to buy Chinese stocks and bonds. Last month China included the HKMA as a Qualified Foreign Institutional Investor. Malaysia’s central bank, GSIC of Singapore, and Abu Dhabi Investment Authority have been granted QFII status. This is seen as part of China’s effort to increase the internationalization of the yuan. HKMA could diversify its reserve into Chinese yuan if it desired. The HKMA’s diversification out of the dollar may be a preliminary step to peg the Hong Kong dollar to the yuan..."