HONG KONG, Dec 28 (Reuters) - China may allow direct investments of yuan into Hong Kong as part of the city's growing role as a testing ground for yuan-denominated services, the city's leader said on Monday after meeting with China's Premier.
Hong Kong, which has been playing an increasingly active role as a centre for yuan denominated products like bonds, and as a cross-border trade settlement hub in yuan, could in future be used as an overseas testing ground for direct yuan investments.
"(Beijing will) continue to expand Hong Kong's role as a cross-border trade settlement centre and explore the development of the yuan's trade financing ... project financing and to use the yuan for direct investments in Hong Kong," said the city's leader Donald Tsang after meetings with China's president Hu Jintao and Premier Wen Jiabao in Beijing. (Reporting by James Pomfret, editing by Anthony Barker)