Swan chases bigger role in renminbi conversion
The visit builds on a previous trip to Hong Kong last July, where Mr Swan established a joint Australia-Hong Kong renminbi trade dialogue. He also tested the waters over whether Australia could become just the third country allowed to directly convert its currency to the renminbi, also known as the yuan.
Mr Swan said the international convertibility of the Chinese currency would become increasingly important as the weight of global economic activity shifted towards Asia.
"As the gateway to China and the largest offshore renminbi market in the world, Hong Kong is an ideal place to discuss renminbi internationalisation," Mr Swan said.
"I will reinforce Australia's keen interest in promoting greater use of the renminbi for international trade and finance, with the renminbi increasingly important in the Asian century as the weight of global economic activity shifts from West to East."
Direct convertibility will benefit Australian miners and other companies that do business with China by lowering transaction costs.
China has signalled that it will continue to open up its capital markets, including by allowing greater access to foreign investors. Chinese analysts believe that the renminbi will become a fully convertible currency to accelerate the opening of China's capital account.
The global bank HSBC has tipped the Chinese government will make the currency fully convertible within the next five years.
On Monday, Mr Swan will speak at the Asian Financial Forum, which brings together members of the global financial and business community to discuss economic trends in Asia.
"At the forum, I will continue to stress the importance of strengthening and developing closer financial integration within the region and the benefits this will bring," he said.
Frequently Asked Questions about this Article…
Wayne Swan is promoting Australia’s role in the internationalisation of the Chinese renminbi, reinforcing Australia’s interest in greater use of the renminbi for international trade and finance and building on a previous trip where he helped establish a joint Australia–Hong Kong renminbi trade dialogue.
Renminbi internationalisation means greater global use and convertibility of China’s currency for trade and finance; it matters to investors because the renminbi’s growing role reflects a shift in global economic activity toward Asia and can affect trade flows, currency markets and investment opportunities tied to the region.
Direct convertibility means allowing a country to convert its currency directly into renminbi without intermediary currencies; Mr Swan has explored whether Australia could become just the third country allowed direct conversion, which would deepen financial links with China.
According to the article, direct convertibility would lower transaction costs for Australian miners and other companies trading with China, making cross‑border trade and finance more efficient for businesses exposed to Chinese markets.
Hong Kong is described as the gateway to China and the largest offshore renminbi market in the world, making it an ideal place to discuss and advance renminbi internationalisation and regional financial integration.
Chinese analysts expect the renminbi to become fully convertible as part of opening China’s capital account, and global bank HSBC has tipped that the Chinese government could make the currency fully convertible within the next five years.
The Australia–Hong Kong renminbi trade dialogue is a joint forum to discuss renminbi trade and finance issues; it was established during Mr Swan’s visit to Hong Kong last July as part of efforts to boost renminbi use between the two markets.
At the Asian Financial Forum Mr Swan will stress the importance of strengthening and developing closer financial integration within the region; the forum brings together the global financial and business community to discuss economic trends in Asia, which is relevant for investors watching regional integration and currency developments.
Call 1300 880 160
Start a chat
Schedule a call
