The move would strengthen the market's role as a key offshore yuan business hub, according to a former vice-minister with the nation's top economic regulator.

The government would select some top companies related to the initiative and facilitate their fundraising in the offshore market, but there is no timeline for when an IPO plan might take place because it remains under discussion, said Zhang Xiaoqiang, vice-chairman of the China Center for International Economic Exchanges. Zhang was consulted on the development plan for the Guangdong-Hong Kong-Macao Greater Bay Area, which has not yet been publicly released.

"Through such attempts, the government hopes Hong Kong would be able to play a greater role in facilitating the initiative on the investment front and further promoting internationalization of the yuan," Zhang said.

Hong Kong's lack of restrictions on capital and currency convertibility makes it ideal as a core center for raising capital for Belt and Road Initiative-related projects, he added.

In the meantime, the government push would help boost the current lackluster sentiment toward renminbi-denominated IPOs in the Hong Kong market.

In May 2011, Hong Kong tycoon Li Ka-shing's Hui Xian real estate investment trust completed Hong Kong's first yuan-denominated IPO, raising 12.1 billion yuan ($1.85 billion).

Since then, there has been no major renminbi-denominated IPO in Hong Kong, and securities traded in renminbi have only a negligible share of the main board's total turnover.

More overseas capital would be willing to bet on renminbi-denominated equities once foreign exchange rate risks are dealt with, providing that the yuan's exchange rate can be stabilized in the next few years, said Billy Mak Sui-choi, an associate professor at the Finance and Decision Sciences Department of Hong Kong Baptist University.

He said he expects the renminbi exchange rate to be stable in the medium term, while long-term prospects depend on Chinese economic growth.