In the latest step towards a full internationalization of China's currency, the finance ministry in Beijing has said it will issue in London around 450 million dollars' worth of so-called 'dim sum' bonds -- bonds issued outside of China but denominated in the Chinese yuan. As Richard Bestic reports from the UK capital, the move will further strengthen growing financial ties between China and the UK and provide a test for the Chinese currency amid concerns over its devaluation.

London The world's biggest foreign exchange trading center and the second largest for yuan, also called the Renminbi.

Now say economists this "dim sum" bond issue will make it a test center too for both the Chinese currency and the markets.

"It's a test of the risk appetite of foreign investors. It is also a test for the ability of the domestic market to absorb, the Chinese domestic market, the ability of the Chinese investment market to absorb foreign investment," said Prof. Xu Xiaonian, Economist, China Business International Business School.

And while the markets will watch closely how the "dim sum" bond issue survives this test, it is regarded among bankers in Britain as an important milestone for the currency's long march to full internationalization.

Important, too, for the health of the City of London, Britain's premier financial district.

"The City can only survive if it can intermediate in global flows. It's easy to project that the biggest source of global flows 10 years, 20 years from now will be China. So, the City is sitting itself in those flows is very important to us," said Sir Gerry Grimstone, Chairman, Standard Life Bank.

And the People's Bank of China, the PBOC, appears to be in agreement.

London plays a unique role in the internationalization of the Renminbi, according to the head of the PBOC's European operation.

"Together with the UK Treasury and the Bank of England, the PBOC would like to further deepen financial and monetary co-operation between China and the UK and promote the diversification of the international monetary system," said Jin Mei, People's Bank of China, Europe.

In recent years, China's bond market has developed rapidly in the words of China's central bank, though this latest bond issue comes at a time of volatility in China's currency. For this reason, there is likely to be many eyes around the world judging its success.