The talks over so-called "current account transactions" include the possibility of letting Hong Kong banks settle trade contracts denominated in renminbi and provide credit services related to renminbi-based letters of credit.
Because of China's strict currency controls, Hong Kong banks cannot handle contracts in renminbi. Hong Kong officials think opening this and other related services will help banks build their business in the Chinese currency, strengthening the territory's position as a financial centre.
"We have started discussions with relevant authorities in Beijing," Henry Tang, Hong Kong's financial secretary, told the Financial Times.
