Chinese Vice Premier Li Keqiang said Wednesday Hong Kong plays an "irreplaceable role" in China's rapid economic growth and will be key to making the yuan an international currency.

Li, the expected successor to Premier Wen Jiabao as head of China's day-to-day administration, also reassured the former British colony -- which returned to China in 1997 -- that its high level of autonomy will be retained.

His visit comes amid strained ties with Hong Kong, while the city government itself faces rising public anger over soaring housing prices and increasing protests calling on Beijing to speed up promised political reforms.

"The central government will continue to be firm on the 'one country, two systems' rule, and the policy of a high degree of autonomy which is to let Hong Kong people rule Hong Kong," the 56-year-old leader told a dinner reception.

The premier-in-waiting urged Hong Kong residents to unite and work with chief executive Donald Tsang's government to focus on "boosting economic development, tackling social issues and gradually pushing for democracy".

Tensions flared last month when Wang Guangya, director of the Hong Kong and Macau Affairs Office of the Chinese State Council, or cabinet, said local officials' colonial-era roots meant they "don't know how to be a boss".

Hong Kong officials including Tsang publicly bristled at the criticism. The city maintains its own political and legal system, and guarantees civil liberties not seen on the mainland.

It has been a key concern among the seven million population that Beijing is becoming more hands-on in the city's affairs, and the belief that it was bowing to Beijing has been cited as one of the reasons of rising public discontent.

Earlier, Li unveiled economic sweeteners including making it easier for Hong Kong firms to do business in China, and reaffirmed the city's status as a hub for Beijing's ambitious goal to turn the yuan into a global currency rivalling the US dollar.

He also said overseas investors would be allowed to buy mainland securities using yuan, starting with an initial 20 billion yuan ($3.13 billion) investment, but gave no timeline for the scheme.

"Hong Kong's destiny and prosperity link closely with those of the motherland," the Chinese vice premier told an economic forum.

He added it was key that Hong Kong "continues to bring out the unique advantage it has developed over the years and play its irreplaceable role in (China's) reform, opening-up and modernisation drive".

Li arrived in Hong Kong Tuesday on a three-day visit as he looks to showcase himself ahead of an expected leadership reshuffle in Beijing next year.

He presided over a signing ceremony Wednesday to launch Beijing's third, and so far biggest, sovereign bond issue in Hong Kong with plans to raise 20 billion yuan, and said China will gradually increase the size of issuance.

So-called dim sum bonds worth about 70 billion yuan were issued in Hong Kong during the first seven months of the year, 95 percent more than the total for all of 2010, according to Hong Kong official statistics.

"Hong Kong is blessed to enjoy the advantages of 'one country, two systems'," said chief executive Tsang.

Outside, a small protest calling for the release of Chinese political detainees was held near the forum, but a heavy police presence kept activists out of sight. A larger protest was expected Thursday as Li wraps up his visit.

Li, a former Communist Party chief in the northeastern industrial province of Liaoning, was China's youngest provincial governor, taking charge of the central province of Henan at the age of 43.

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