China will further loosen control on cross-border yuan direct investment in an effort to boost more of such investment, the Ministry of Commerce (MOFCOM) said in a statement on Monday.

In cross-border yuan direct investment, overseas investors (including those from Hong Kong, Taiwan and Macao) can use yuan obtained legally from overseas to invest in the mainland by setting up companies, increasing investment, or participating in mergers and acquisitions of mainland firms, the statement said.

Under the new regulation, which will take effect on January 1, 2014, approval procedures for cross-border yuan direct investment will be further simplified, according to the ministry.

However, Chinese firms that are funded by overseas investment will still be forbidden to use overseas yuan-denominated funds to invest in securities, financial derivatives, or provide entrusted loans in the mainland, the ministry said.

China began to allow cross-border yuan direct investment in October 2011.

The amount of cross-border yuan direct investment was 280.2 billion yuan ($46.1 billion) in 2012, surging by 152.66 percent from a year earlier, according to data released by the People's Bank of China on December 11.

The country has rolled out a batch of measures to boost the use of its currency in cross-border trade and investment settlements in recent years, a move to facilitate the yuan's internationalization process.

Yuan-denominated cross-border trade settlement is expected to increase by roughly 50 percent year-on-year to reach 6 trillion yuan in 2014, equivalent to nearly 20 percent of China's global trade volume, Deutsche Bank said in a report published on Wednesday.

The MOFCOM's latest move is part of efforts by Chinese authorities to simplify administrative approval procedures.

The National Development and Reform Commission, China's top economic planner, has canceled four administrative approvals, including a requirement for new coal firms to obtain a coal production license and permit, the commission said in a statement released on Monday.

Global Times