China set new rules on Tuesday to regulate the issuance of yuan-denominated bonds in Hong Kong by non-financial institutions on the mainland, marking the latest effort to diversify the investment channel for offshore yuan deposits.

"The rule is to regulate renminbi bond issuance in Hong Kong by the mainland's non-financial institutions and to effectively prevent the risks from foreign debt," said a statement from the National Development and Reform Commission, the country's top economic planning organ.

Vice-Premier Li Keqiang unveiled the offshore yuan bond market, also known as the "dim sum" bond market, last August to allow mainland banks and non-financial institutions to issue bonds in Hong Kong.

The first-ever issue by a non-financial firm was conducted by steelmaker Baosteel Group Corp in November, when it raised 3.6 billion yuan of dim sum bonds in two-, three- and five-year notes.

According to the regulations, companies planning to sell yuan bonds in Hong Kong must submit an application and only those with "strong profitability" and "good credit status" would get the green light from the authority.

Proceeds obtained from the bond sales should be primarily devoted to fixed-asset investment projects, which must stand in line with the country's outlines for industry development.

hewei@chinadaily.com.cn