BEIJING (BLOOMBERG) - China plans to issue yuan-denominated sovereign bonds in London for the first time as it seeks a greater role for its currency in global trade and finance, according to people familiar with the matter.

The sale would be the first offshore issuance of the notes outside of Hong Kong and is expected to take place after the People's Bank of China sells one-year bills in the UK capital, said the people, who asked not to be named as the proposal has yet to be announced. The central bank's offering, which is being arranged by Industrial & Commercial Bank of China and HSBC Holdings, is due to take place by early November.

"It's time for China to broaden the sovereign bond market beyond Hong Kong," said Ngan Kim Man, deputy head of treasury at China Everbright Bank Co.'s Hong Kong branch. "It's quite a natural move and can bolster yuan usage in Europe. It's part of the yuan internationalization strategy."

Asia's biggest economy is allowing global funds increased access to its domestic capital markets and broadening the range of yuan-denominated investments available offshore as it pushes for the currency to win reserve status at the International Monetary Fund in a November review. Issuing notes in London will help cement the UK's place as the yuan trading centre for Europe as Paris and Frankfurt compete for a share of the market.

London is the biggest yuan clearing center in Europe and trails only Hong Kong and Singapore in the offshore market, according to the Society for Worldwide Interbank Financial Telecommunications. The PBOC will sell as much as 5 billion yuan ($788 million) of one-year bills in the UK within a month, which would be the central bank's first issuance outside of the domestic market, people familiar with the matter said last week. Chinese lenders including China Development Bank and China Construction Bank Corp. have previously issued yuan-denominated debt in London.

China's planned sale of sovereign bonds was earlier reported by the Financial Times and comes before President Xi Jinping pays his first state visit to the UK during the Oct. 19-23 period.

In August, the yuan became the fourth most-used currency for global payments with a 2.79 per cent share, surpassing the Japanese yen.