Chinese financial regulators have approved global hedge funds to raise renminbi on the mainland for investment abroad, part of the city’s plan to become a global financial center by 2020, South China Morning Post reported. The Shanghai Municipal Office of Financial Service received the guidelines from mainland securities and foreign exchange regulators, said people familiar with the matter. The rules stipulate that foreign funds be registered in Shanghai. The business would come with some foreign-exchange risk, since funds will have to convert the yuan to other currencies such as US dollars for investment, and then back into yuan to repay Chinese investors. But foreign hedge funds are still likely to see the opportunity as attractive, since the financial crisis has clamped down on their avenues for capital raising, especially in the US.