T?he rise of the renminbi in Hong Kong is a tale of two cities. One is the city of high finance in Hong Kong’s business district where bankers are abuzz with excitement at the rapid increase in the use of China’s currency for trade finance and corporate bond issues.

With the mainland currency not fully convertible, Beijing is using Hong Kong as a laboratory where international companies can hold and trade renminbi-denominated products. In a mirror-image of the way that Deng Xiaoping, the late Chinese leader, designated Shenzhen, the Chinese city bordering Hong Kong, as a “special economic zone” for overseas manufacturing investment 30 years ago, Hong Kong is being used as a testing ground for further liberalisation of the renminbi.

In the other Hong Kong, rents and salaries continue to be paid in Hong Kong dollars and shoppers still use the currency, although many retailers happily accept renminbi from mainland Chinese tourists. “The question is does this represent a tectonic plate shifting or is this just another currency option?” asks Mark McCombe, chief executive of HSBC’s Hong Kong operations.