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Combining tax cuts with Hong Kong’s status as the world’s leading offshore renminbi (Rmb) centre, the Hong Kong government has embarked on an aggressive campaign to dislodge Singapore as the leading regional treasury hub.

Hong Kong is offering new treasury centres a 50% tax break in a bid to attract more multinational companies to the Special Administrative Region of China.

Speaking at a conference in the city this morning, the Hong Kong Monetary Authority (HKMA)’s executive director Howard Lee described a budgetary initiative which came into play this year and which cuts the profits tax for income from treasury to just 8.25%.

Last year, Hong Kong banks settled trade totalling Rmb$6tn, over 17 times more than the previous year. And with the Chinese government pursuing an accelerating currency liberalisation programme, the message being transmitted is clear: for those who wish to trade with China in its own currency, Hong Kong is the place to be.

The Association of Corporate Treasurers’ (ACT) engagement director described the tax break – which was introduced after two year in the works – as “unusual”, adding: “You don’t see that in too many financial centres around the world.”

In what has been a tumultuous couple of months for China’s economy, Hong Kong’s has not escaped unscathed. It’s been reported that Hong Kong’s IPO market is the worst performing in the world this year, and while overall loan defaults have not grown as substantially as you might expect, it’s understood that the concentration of the defaults in the trade and commodities sectors has increased significantly.

In something resembling a charm offensive, however, the HKMA was keen to portray China’s recent forays into the currency market as being progressive, saying that they show Beijing pursuing a path towards “market orientation” rather than a move designed to boost trade by undercutting the devaluated currencies of its neighbours.

The Rmb has lost around 3% of its value in recent weeks, compared to 5% shed by the Indian rupee this year, 6% by the Singapore dollar and 7% by the Korean won. All of these point to the fallout from a strengthening US dollar, said Lee, rather than overzealous monetary policy by the People’s Bank of China (PBOC).

Currently, just 20% of China’s trade is settled in Rmb, compared with the US settling 80% of its trade in US dollar, the Eurozone settling 50% of its trade in euro and even Japan settling up to 40% in yen.

Patrick Zhu, a senior official in HSBC’s global payments and cash management team, says that the next year or two will be crucial in China’s journey towards full liberalisation, adding that he expects full exchange rate convertibility and a completely open current account to be two of the main developments.

All of these are ostensibly designed to boost the Rmb’s profile internationally. The currency will not be included in the IMF’s special drawing rights basket this year, after the Washington-based fund delayed the decision until 2016, but as China prepares to launch its One Belt One Road investment strategy, the HKMA is expecting a huge pickup in Rmb payments.

Currently, just 20% of China’s trade is settled in Rmb, compared with the US settling 80% of its trade in US dollar, the eurozone settling 50% of its trade in euro and even Japan settling up to 40% in yen. With the roll-out of a smorgasbord of infrastructure projects stretching from East Asia to Western Europe, Lee expects Chinese companies to become more outward-looking, participating in projects and deals overseas as a matter of course, and anticipates China increasing its Rmb-settled trade to some 50% over the coming years.