China has drafted guidelines that will allow its currency to be used for foreign direct investment in the world's second-largest economy.

The guidelines drafted by the Commerce Ministry would let foreign investors use yuan raised through cross-border trade settlements, offshore bond issues or share sales.

The ministry is accepting public feedback on the guidelines until August 31.

China has been allowing greater use of its currency for cross-border transactions to reduce its reliance on the U.S. dollar and make the yuan a global currency.

China has long maintained strict controls on its currency, prompting criticism from the United States and other nations that it is artificially holding down its value in order to give Chinese exporters a trade advantage.