Tu Guangshao, former president of China Investment Corp, said in late December that Shanghai's position as a leading financial center was faced with new requirements when China adopted its dual-circulation development strategy.

A long-term goal should be set for Shanghai for the next 15 years. By 2035, Shanghai should aim to be a top global financial center featuring yuan-denominated assets accessible to investors from all over the world as well as a modern and open financial market, Tu said.

To promote the allocation of yuan-denominated assets worldwide, opening-up in the financial sector is vital. To be specific, foreign institutions should be allowed to conduct more business. Cross-border transfer of renminbi assets should be launched and conducted steadily. An international securities trust institution should be set up in Shanghai. Capital account convertibility should be advanced via multinational companies' capital pool, which over time will also help to optimize the integrated capital pool of domestic and foreign currencies, Tu added.

Shanghai should be able to guarantee liquidity when investors are settling or hedging risks for renminbi assets, said Zhou Chengjun, director of the research institute at the People's Bank of China, the central bank.

Zhou said overseas entities now hold up to 6.8 trillion yuan ($1.05 trillion) of renminbi assets, most of which is invested via the Shanghai and Hong Kong bourses, and this large amount does not make for an ideal scenario.

Throughout the process of the internationalization of the renminbi, an increasing number of people not residing in China will show preference for these new products. But not all overseas individual investors are able to open stock trading accounts in China. Besides, unlike large institutions such as Bridgewater and Blackstone, which both have the willingness and ability to manage risk, individuals are less aware of procedures for registering, depositing or trading renminbi assets.

So the best solution is to allow these individuals to buy renminbi assets in their home countries where they will be subject to local laws and regulations, Zhou said.

Under such circumstances, the trading of billions of yuan assets may not be settled in Shanghai in the future. This may seem contradictory to Shanghai's drive to become a global financial center, but it should be noted that the final clearing and depository venue should be located on the Chinese mainland. The high yield of renminbi assets will be eventually realized on the Chinese mainland, Zhou added.

"Therefore, we should set up a multi-tranche renminbi asset depository system which covers all the world and is centered in Shanghai. World leading investment institutions can open accounts in Shanghai and buy renminbi assets. They can then redistribute the renminbi assets to investors all over the world. Foreign investment banks can also issue renminbi assets in their home countries and use financing to invest in Shanghai as long as they are competent," he said.