Aberdeen Asset Management has just received a Qualified Foreign Institutional Investor (QFII) licence from the China Securities Regulatory Commission to invest in domestic Chinese securities.

The investment manager is looking to expand its fixed income business in the region, it said in a statement. At present, its Singapore-based Asian fixed income team is responsible for over $5 billion on behalf of both regional and global investors. Aberdeen is now awaiting a separate foreign exchange quota from the State Administration of Foreign Exchange, which can go up to $200 million.

China has a large domestic currency market and comprises nearly 15 per cent of the widely-used Iboxx Asia ex-Japan local currency index. The company sees China's index share growing substantially over the next few years, as more companies are encouraged to diversify their financial activity away from bank debt.

Aberdeen has no immediate plans to launch a new fund after being granted the licence.