There will be no cap on cross-border yuan lending in Qianhai - the testing ground for full currency convertibility - says the official in charge of the special economic zone neighbouring Hong Kong.
Zhang Bei said the business would rise rapidly in the next two to three years.
"The more companies come to Qianhai for business, the more loans banks will provide, and the size of the cross-border yuan lending business will grow bigger and bigger," Zhang said.
In January, 15 Hong Kong and international banks were allowed to offer a combined 2 billion yuan (HK$2.52 billion) of loans to companies registered in Qianhai. Zhang said the government would not interfere in the use of these loans as long as the money was not used in the stock market or to take advantage of the interest rate gap between the mainland and Hong Kong.
"You can actually use the money you get in Qianhai to buy things outside Qianhai, because we do understand you won't find everything you need here," said Zhang. "For example, if you get your office in Qianhai, you need a cross-border loan to build the office."
Zhang said he expected to see the size of cross-border yuan loans easily growing to tens of billions of yuan annually over the next two to three years, as office blocks were built in the zone.
By the end of last month, Qianhai had recorded cross-border yuan loans totalling 5.25 billion yuan.
On Tuesday, Qianhai unveiled rules to allow developers to bid for public land.
Several Hong Kong developers, including Sun Hung Kai Properties and New World Development, have shown strong interest in the land auctions, said Zhang, adding that those sites would be used to house many Hong Kong and foreign banks in coming years. The area would be akin to Central in Hong Kong or Wall Street in New York, he said.
A year ago, Qianhai was named China's test bed for a freer flow of yuan and greater currency convertibility for investment purposes. Beijing wants to increase international use of the yuan in step with China's growing economic power and to take on the US dollar in the global financial system.
China's settlement of trade in yuan leapt 41.3 per cent last year to 2.9 trillion yuan. About 12 per cent of the country's trade is settled in yuan and that proportion must grow substantially to further Beijing's ambition to unseat the US dollar as the world's prime settlement and reserve currency.More on this: