China's central bank approved a South Korean plan to issue yuan-denominated foreign exchange stabilization bonds in the world's No. 2 market, the government said Tuesday.
  

The finance ministry said the People's Bank of China approved the issuing of upwards to 3 billion yuan ($463 million) worth of bonds.
  

This is the first time Beijing has approved the floating of yuan-based bonds by a foreign government inside China, and it follows a visit by Chinese premier Li Keqiang to Seoul on Oct. 31, the ministry said.
  

During his visit, Li discussed ways to expand bilateral financial and foreign exchange sector cooperation.
  

"The approval is expected to expand two-way trade and cooperation in the financial field, as well as help open China's bond market to the outside world," the ministry said.
  

As part of its move to issue the bonds, the government will host road shows in Shanghai and Beijing on Wednesday and Friday to outline its plans to local investors, it said. The events will also allow Seoul to highlight South Korea's economic potential.
  

The sale, expected to take place within the year, will moreover help South Korea increase its holding of the Chinese currency.
  

Market watchers said that issuing bonds in China will make it much easier for local companies to get their hands on the currency, which can fuel commerce. In the past, local companies got yuan indirectly through Hong Kong and Taiwan.
  

In addition, they said the latest move can make it possible for local companies to issue their own yuan-based corporate bonds in China down the road. (Yonhap)