Opportunities for RMB use expected in Australia
Expanding business links are creating new opportunities for the use of renminbi in Australia's financial sector, as trade settlements, investments and other transactions in the Chinese currency continue to grow, experts said.
James McIntosh, country head for institutional equity broker and corporate advisory group CLSA Australia, said significant growth areas include RMB settlement in major sectors like resources.
"A big part of the growth we see coming in that space is around RMB-denominated futures contracts because they provide the necessary financial instruments for both Chinese and Australian enterprises to manage price risks in the same currency settlement," he said at a business gathering focusing on new opportunities presented by the RMB.
While the US dollar remains the dominant settlement currency, the adoption of the RMB in commodity trading is a big driver of the internationalization of the Chinese currency, McIntosh said.
Shifting to the RMB "would require bilateral agreement with Chinese buyers and a fundamental shift in how global commodity markets operate", Wei Li, a senior lecturer in international business at the University of Sydney Business School, told China Daily.
There is growth in RMB use in sectors where China leads supply chains, such as electric vehicles and machinery, said Li, whose research includes RMB internationalization and the globalization of Chinese enterprises and economy.
Australian businesses still need to strengthen their capability to understand China's institutions and regulatory framework in order to reduce costs and increase efficiency, Li said.
China and Australia have strong cooperation in trade and finance, with collaboration in areas such as infrastructure development and sustainable financing expanding in recent years, said Liang Heng, chief business officer at the China Central Depository and Clearing, or CCDC.
"We are pleased to see more and more Australian financial institutions actively participating in RMB clearing, settlement and investment. This has injected vitality into regional development and advanced RMB internationalization," Liang said.
Strong complementarity
Wang Chunsheng, acting consul general of the Chinese Consulate General in Sydney, highlighted the steady progress of the Chinese currency in the international arena. "In recent years, the RMB's internationalization has advanced steadily, with wider use in cross-border trade and stronger global influence," he said.
Wang emphasized the strong complementarity between the Chinese and Australian economies, covering energy, agriculture, green development and innovation, and said more business exchanges and cooperation in varied fields could be expected in the near future.
The Bank of China, which is marking 40 years of services in Sydney, has significantly facilitated the implementation of major China-Australia cooperation projects and helped Chinese enterprises effectively manage exchange rate risks and transaction costs, said Li Mang, general manager of the bank's Sydney branch.
The branch has also been providing stable and reliable financial support for Australian local businesses to deepen cooperation with China, he said.
As the Chinese bank with the longest operating history in Australia and the only RMB clearing bank in the South Pacific region, the BOC Sydney branch will "continue to serve as a financial bridge, promoting high-quality financial cooperation to help Chinese and Australian enterprises achieve sustainable development", he said.
The branch's premier RMB services include savings, foreign currency exchange, personal and corporate lending, corporation remittance, and offshore negotiated deposits.
Contact the writers at xinxin@chinadaily.com.cn
