Hong Kong could be used as a trial ground before the Chinese renminbi (RMB) leapfrogs to the international markets as a transaction currency, said a former central bank official in Beijing on Monday on the sidelines of the annual National People's Congress (NPC), the nation's top legislature.

"An offshore center could be established in Hong Kong for the RMB to try on various investment products, to see what problems or risks might occur if the RMB really went international," said Wu Xiaoling, former Deputy Governor of the People's Bank of China and also Deputy Chairwoman of the Financial and Economic Affairs Committee of the NPC.

However, Wu cautioned "the process would take a very long time since the country's economy is not adequately developed yet for an internationalized currency."

Besides that, she added two other preconditions: a mature financial market with ample investment products and a healthy corps of entrepreneur and financial institutions.

"For example, with the RMB at hand, people should know what they could do," said Wu, explaining how the country's underdeveloped financial market has stymied investment.

(China Daily March 8, 2010)