News / Asia

    Australia Announces Landmark China Currency Deal

    Australian Prime Minister Julia Gillard answers question from guests at China Executive Leadership Academy Pudong (CELAP) in Shanghai, China, Apr. 8, 2013.
    Australian Prime Minister Julia Gillard answers question from guests at China Executive Leadership Academy Pudong (CELAP) in Shanghai, China, Apr. 8, 2013.
    Phil Mercer
    Australian Prime Minister Julia Gillard says the Australian dollar will be traded directly with the Chinese yuan under a landmark currency deal.  The move is part of Canberra’s efforts to strengthen Australia’s burgeoning economic relationship with China.
     
    The currency deal will lower transaction costs for Australian companies doing business in China.  No longer will they have to convert their finances into U.S. dollars, and then into Chinese yuan, which is also known as the renminbi.  Under the new arrangement, the Australian dollar will be only the third major currency that will be directly tradable with the yuan, after the U.S. dollar and the Japanese yen.
     
    Speaking on an official visit to Shanghai, Australian Prime Minister Julia Gillard said the deal would be a “foundation stone” for future jobs and investment.
     
    China is Australia's biggest trading partner, with combined two-way commerce worth $120 billion.  Chinese demand for natural resources, most notably iron ore and coal, helped insulate Australia from the worst of the global financial crisis, although trade in commodities is beginning to slow.
     
    Gillard says the currency deal will boost the Australian economy. 

    “Australian dollars can be directly traded into renminbi [yuan], into the Chinese currency RMB here in China -- the third currency in the world to do so, after the U.S. dollar and the Japanese yen," she stated. "This is a huge advantage for Australia; not only for our big business, but also for our small and medium enterprises that want to do business here.”
     
    Two of Australia’s biggest banks, ANZ and Westpac, have been granted licenses by Chinese authorities for direct trading.

    ANZ is Australia's largest bank in China. Its boss, Mike Smith, says the deal will make doing business in China both cheaper and simpler. 

    “For example, in a trade document rather than go through U.S. dollars, and having the movement of the currency over time, you can immediately lock in your exchange rate.  So you basically are able to create your own forward contract far more easily than you would have been able to do otherwise,” he said.
     
    Banking analysts say the launch of the new Australian dollar-Chinese Yuan trading arrangement is another small step in China’s efforts to increase international use of its currency.
     
    If it could rival the U.S. dollar, analysts believe that Chinese companies would enjoy lower foreign-exchange costs, and bolster China's status in the global monetary system.
     
    In recent months, central banks from Japan, South Korea, and Saudi Arabia have indicated plans to diversify their currency reserves into the yuan.

    You May Like

    Escalation of Media Crackdown in Turkey Heightens Concerns

    Critics see 'a new dark age' as arrests of journalists, closures of media outlets by Erdogan government mount

    Russia Boasts of Troop Buildup on Flank, Draws Flak

    Russian military moves counter to efforts to de-escalate tensions, State Department says

    Video Iraqis Primed to March on Mosul, Foreign Minister Says

    Iraqi FM Ibrahim al-Jaafari tells VOA the campaign will meet optimistic expectations, even though US officials remain cautious

    This forum has been closed.
    Comments
         
    There are no comments in this forum. Be first and add one

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Immigrant Delegate Marvels at Democratic Processi
    X
    Katherine Gypson
    July 27, 2016 6:21 PM
    It’s been a bitter and divisive election season – but first time Indian-American delegate Dr. Shashi Gupta headed to the Democratic National Convention with a sense of hope. VOA’s Katherine Gypson followed this immigrant with the love of U.S. politics all the way to Philadelphia.
    Video

    Video Immigrant Delegate Marvels at Democratic Process

    It’s been a bitter and divisive election season – but first time Indian-American delegate Dr. Shashi Gupta headed to the Democratic National Convention with a sense of hope. VOA’s Katherine Gypson followed this immigrant with the love of U.S. politics all the way to Philadelphia.
    Video

    Video A Life of Fighting Back: Hillary Clinton Shatters Glass Ceiling

    Hillary Clinton made history Thursday, overcoming personal and political setbacks to become the first woman to win the presidential nomination of a major U.S. political party. If she wins in November, she will go from “first lady” to U.S. Senator from New York, to Secretary of State, to “Madam President.” Polls show Clinton is both beloved and despised. White House Correspondent Cindy Saine takes a look at the life of the woman both supporters and detractors agree is a fighter for the ages.
    Video

    Video Dutch Entrepreneurs Turn Rainwater Into Beer

    June has been recorded as one of the wettest months in more than a century in many parts of Europe. To a group of entrepreneurs in Amsterdam the rain came as a blessing, as they used the extra water to brew beer. Serginho Roosblad has more to the story.
    Video

    Video First Time Delegate’s First Day Frustrations

    With thousands of people filling the streets of Philadelphia, Pennsylvania for the 2016 Democratic National Convention, VOA’s Kane Farabaugh narrowed in on one delegate as she made her first trip to a national party convention. It was a day that was anything but routine for this United States military veteran.
    Video

    Video Commerce Thrives on US-Mexico Border

    At the Democratic Convention in Philadelphia this week, the party’s presumptive presidential nominee, Hillary Clinton, is expected to attack proposals made by her opponent, Republican presidential nominee Donald Trump, to build a wall along the U.S.-Mexico border. Last Friday, President Barack Obama hosted his Mexican counterpart, President Enrique Peña Nieto, to underscore the good relations between the two countries. VOA’s Greg Flakus reports from Tucson.
    Video

    Video Film Helps Save Ethiopian Children Thought to be Cursed

    'Omo Child' looks at effort of African man to stop killings of ‘mingi’ children
    Video

    Video London’s Financial Crown at Risk as Rivals Eye Brexit Opportunities

    By most measures, London rivals New York as the only true global financial center. But Britain’s vote to leave the European Union – so-called ‘Brexit’ – means the city could lose its right to sell services tariff-free across the bloc, risking its position as Europe’s financial headquarters. Already some banks have said they may shift operations to the mainland. Henry Ridgwell reports from London.
    Video

    Video Recycling Lifeline for Lebanon’s Last Glassblowers

    In a small Lebanese coastal town, one family is preserving a craft that stretches back millennia. The art of glass blowing was developed by Phoenicians in the region, and the Khalifehs say they are the only ones keeping the skill alive in Lebanon. But despite teaming up with an eco-entrepreneur and receiving an unexpected boost from the country’s recent trash crisis the future remains uncertain. John Owens reports from Sarafand.
    Video

    Video Migrants Continue to Risk Lives Crossing US Border from Mexico

    In his speech Thursday before the Republican National Convention, the party’s presidential candidate, Donald Trump, reiterated his proposal to build a wall along the U.S.-Mexico border if elected. Polls show a large percentage of Americans support better control of the nation's southwestern border, but as VOA’s Greg Flakus reports from the border town of Nogales in the Mexican state of Sonora, the situation faced by people trying to cross the border is already daunting.
    Video

    Video In State of Emergency, Turkey’s Erdogan Focuses on Spiritual Movement

    The state of emergency that Turkish President Recep Tayyip Erdogan has declared is giving him even more power to expand a purge that has seen an estimated 60,000 people either arrested or suspended from their jobs. VOA Europe correspondent Luis Ramirez reports from Istanbul.
    Video

    Video Calm the Waters: US Doubles Down Diplomatic Efforts in ASEAN Meetings

    The United States is redoubling diplomatic efforts and looking to upcoming regional meetings to calm the waters after an international tribunal invalidated the legal basis of Beijing's extensive claims in the South China Sea. VOA State Department correspondent Nike Ching has the story.
    Video

    Video Scientists in Poland Race to Save Honeybees

    Honeybees are in danger worldwide. Causes of what's known as colony collapse disorder range from pesticides and loss of habitat to infections. But scientists in Poland say they are on track to finding a cure for one of the diseases. VOA’s George Putic reports.

    Special Report

    Adrift The Invisible African Diaspora