Chinese authorities are working on a plan to develop a special economic zone in China's southern province of Shenzhen which will focus on growing the financial and services sector, the China Securities Journal said on Thursday, Reuters reports. Citing unidentified government officials, the paper said the government aims to transform Shenzhen's port city of Qianhai into a key financial centre and was seeking Beijing's support for innovations, such as setting up an insurance exchange and a market for banking instruments.

The city is also planning to become a cross border yuan settlement hub that will serve as an offshore centre for Hong Kong, it said.

Authorities are currently working on concrete measures to rapidly promote the area, the paper said, and may introduce preferential policies for financial sector development to encourage banks to set up shop, the newspaper said.

The Shenzhen government is also seeking Beijing's approval to launch commodities futures exchanges, cross-border gold exchange and a reinsurance exchange, the paper said.

Shenzhen is competing with Shanghai to play a bigger role in China's financial liberalisation. Earlier this week, Shanghai unveiled plans to expand its financial markets and boost foreign participation over the next four years as part of efforts to develop the city into a global financial hub by 2020.