HONG Kong and Australia officials will discuss the potential for direct conversion of the Australian dollar and the Chinese yuan, particularly in the area of commodity exports, Australian Treasurer Wayne Swan said yesterday.
The high-level talks, which will start in Sydney next year, will also support the development of new yuan-denominated financing and investment products, said Swan, who was speaking at a Hong Kong forum before traveling to Beijing.
"The dialogue will bring together senior banking and other business leaders from Australia and Hong Kong to maximize the significant opportunities flowing from the wider use of the yuan in trade and investment in our region," Swan said.
"The yuan's internationalization is an important step in China's economic and financial reform agenda that has spanned more than three decades and is key to greater exchange rate flexibility."
China is Australia's biggest trading partner, with bilateral trade worth A$113.7 billion (US$116.86 billion) in 2011, and Australia has been keen to become the third country allowed to directly convert capital amounts to yuan, after the US and Japan. But other countries, including Britain and Singapore, are also vying for easier access to yuan trade.
Direct conversion of Australian dollars and yuan would reduce trading costs between the two countries.
China is Australia's top export spot, with last year's A$71.5 billion accounting for 27.3 percent of Australia's exports.
Australia's resource exports, particularly iron ore, are fueling China's growth, and its miners are betting heavily on continued demand from China's massive urbanization, with A$137 billion in engineering work in the pipeline, or almost 10 percent of Australia's A$1.4 trillion of gross domestic product.
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