Australia and China have agreed to enhance offshore market development of the Renminbi (RMB), China’s currency.
Australia is at the forefront of countries working with China to support international use of the RMB.
Australian banks and their Chinese counterparts have worked hard to promote direct trading of the two currencies.
Monthly trading volumes have increased more than seven-fold in the past year to US$2.4 billion from US$324 million equivalent before direct trading.
The Australian dollar has become the fourth most traded currency on China’s Foreign Exchange Trading System and there is significant potential for this market to grow.
China’s leaders have sent a strong signal of their commitment to a comprehensive program of economic reform. Financial sector reform will be central to achieving this.
These reforms will better integrate China into the global economy by breaking down the walls that prevent the free flow of capital to the rest of the world. It will see China further liberalise its exchange rate and promote the international use of its currency.
The central banks of Australia and China are working together on potential future clearing and settlement arrangements in Sydney.
When I travel to China for the Strategic and Economic Dialogue later in the year, I will explore further steps to promote economic and financial cooperation between Australia and China.
Australia's business delegation to the inaugural Australia Week in China demonstrated a high level of interest in the economic relationship between our two countries. Banks, fund managers, farmers and miners all stand to benefit from Australia's positioning as an offshore RMB centre.
2014 is a year of opportunity for China and Australia to deepen financial ties.
Today's announcement of enhanced cooperation to support RMB offshore market development in Sydney is another important sign that Australia is under new management and open for business.