Updated at 12.17pm: Financial Secretary Henry Tang Ying-yen said the government was discussing with mainland authorities whether to allow Hong Kong-based institutions to issue Renminbi bonds. Renminbi bonds are bonds issued in mainland currencies - Renminbi or yuan. Mr Tang said late on Monday the discussions focused on whether issuing the bonds would be beneficial to both sides. Local currency bond issues allow multinational companies and organisations to reduce currency risks and match their funding needs with sources of capital. The Renminbi bond issue is one of the many initiatives discussed as part of moves to allow more yuan-related business in Hong Kong. Hong Kong banks began conducting four types of yuan service - deposit taking, credit cards, remittance and foreign exchange - in February. 'With the introduction of the four banking services on Renminbi, we are quite happy about the results. It has been steady, it has been active ... we are looking to pursue more Renminbi services,' Mr Tang told reporters at the Hong Kong Economic Summit. Mr Tang also said there were other considerations. 'However, Renminbi is still not a convertible currency,' he said. Huang Yukon, the World Bank's country director for China, has said Renminbi bond issues would help develop the mainland's capital market and widen the range of financial instruments available to investors. But the Chinese government was cautious about allowing overseas companies to issue Renminbi bonds, analysts said. This is because it could lead to capital account liberalisation. In the US, the bond market is equivalent to 143 per cent of the country's gross domestic product. In contrast, China's bond market accounts for only 29 per cent of GDP, according to Chinese academics. In recent years, many international institutions have considered issuing Renminbi bonds under the encouragement of the mainland. Earlier this year, Chinese officials encouraged United States giant General Electric (GE) to issue yuan debt to fund expansion of its mainland businesses.