'First of all, this arrangement will strengthen our banking system; give them new business opportunities. It will also give enormous security for the trading entities in Hong Kong.

'Enterprises doing import, export and trading will be able to make use of RMB [renminbi] resources. Therefore, it provides greater security in this particular time of need and definitely will then create more jobs for Hong Kong. This will have nothing to do with the Hong Kong-linked exchange rate with the US dollar, which has been an anchor of Hong Kong's financial stability.'

Hong Kong was technically ready to implement the scheme but was waiting for more details, which Mr Tsang said were expected very soon. The pilot programme will initially be limited to Shanghai, Guangzhou, Shenzhen, Zhuhai and Dongguan, and will cover imports, exports and re-exports.

David O'Rear, the chief economist at the Hong Kong General Chamber of Commerce, said he expected companies in Hong Kong that currently qualify under the Closer Economic Partnership Arrangement free-trade pact with the mainland to also be eligible to benefit from yuan settlement. But Federation of Hong Kong Industries chairman Clement Chen Cheng-jen said the scope of the pilot programme might be limited to major companies initially.

Using yuan, which is not fully convertible, to settle cross-border transactions would let companies doing business with mainland enterprises better manage exchange-rate risk, Mr Tsang said. Currently, the common practice is to settle such trades in US dollars.

Factories on the mainland use yuan to pay their workers and bills and buy raw materials. They would benefit from being able to settle cross-border transactions in the same currency.

New business opportunities will also arise for banks in Hong Kong.

'The banks are set to provide Hong Kong enterprises with RMB services over a wide range. That means the banks can expand extensively their RMB services from individual clients to enterprises,' Mr Tsang said.

'The scheme will enhance the diversity of RMB assets in the Hong Kong banking system, increase the local capital liquidity of the yuan, and bolster the RMB clearing platform in Hong Kong. These developments will pave the way to further promote RMB businesses in Hong Kong.'

Bankers hope that trade finance could be allowed under the scheme, as they could then provide yuan funding to meet companies' needs.

A source said Hong Kong had always striven for trade finance as part of the scheme, but the decision lay with the mainland authority.

Secretary for Financial Services and the Treasury Chan Ka-keung said companies in Hong Kong would probably not be subject to minimum size or capital criteria to benefit from the pilot programme.

Although there was some concern Hong Kong could be at a disadvantage and face challenges from Shanghai - since the city is also a yuan clearing centre on the mainland - the source said Hong Kong and Shanghai could complement each other.

'Hong Kong has positioned itself as the most efficient platform outside [mainland] China,' the source said. The source said Hong Kong has a niche since it's an open market where many multinational companies have a presence, and they might be interested in settling their yuan trade with yuan through Hong Kong, if allowed.