none

China currency deal to boost trade

10-04-2013
by 
in 
China currency deal to boost trade

 

The recent landmark currency agreement between Australia and China is good news for Australian manufacturers.

Under the agreement, exporters will be able to directly trade the Australian dollar with the yuan and vice versa.

The deal, which was struck during Prime Minister Julia Gillard’s China visit, means the Australian dollar will be the third major currency after the US dollar and Japanese yen to be directly traded in China with the yuan.

The agreement is intended to reduce costs for Australian businesses trading with China.

The PM says this will boost Australia's banks, super funds and the financial services sector.

The major benefit from direct convertibility of the currencies is a reduction in transaction and hedging costs. It removes the need to involve a third currency (generally the US dollar) in foreign exchange transactions.

In the long term this could result in considerable saving for Australian companies now exporting to China. It also helps to progress Australia’s ambitions to be a regional financial centre.

Ms Gillard says the agreement reflects the rapid growth of bilateral trade with China and the value of two-way investment.

She said the new measure would further strengthen the economic relationship between Australia and China.

The PM’s announcement follows an agreement between the Reserve Bank and China’s central bank last year for a $30 billion currency swap. It is part of a push by Chinese authorities to develop the renminbi into a regional reserve currency.

Speaking on the ABC’s AM program, Ms Gillard said: “I think that there is every reason to be very optimistic about the way in which we can build for the future.”

Related news & editorials

  1. 20.09.2018
    20.09.2018
    by      In
    Control Logic has set its sights on expansion, with a new leadership team incorporating key roles in products and marketing, sales and development, and operations and services. The move aims to increase the company’s skill set and focus to drive innovation and expand the company’s expertise and... Read More
  2. 19.09.2018
    19.09.2018
    by      In
    The Australian Made Campaign is providing some valuable support for the nation’s furniture manufacturers with its latest initiative, which urges local buyers to ‘take comfort in their purchase’ and choose genuine Aussie furniture, bedding and furnishings this spring.
    According to Australian Made... Read More
  3. 12.09.2018
    12.09.2018
    by      In
    Siemens has unveiled its new manufacturing facility in Yatala (Queensland), which has been set up to support the growing global demand for the locally developed Fusesaver medium-voltage circuit breaker.
    The new factory is part of an ongoing $25 million investment in manufacturing and research of... Read More
  4. 11.09.2018
    11.09.2018
    by      In
    APS Industrial has relocated its Melbourne base into an all-new 4500m2 head office and national distribution centre in Rowville. The new facility includes an interactive product showcase room and state of the art conference facility.
    According to APS Industrial MD David Hegarty, “Since our launch... Read More