Sydney to become settlement hub for Renminbi

19 November 2014

Shanghai delegation

NSW Premier Mike Baird has welcomed the announcement from the Australian and Chinese Governments that Sydney will become an offshore settlement hub for the Chinese currency, the Renminbi.

Mr Baird said the NSW Government had been a major driver behind the push for Sydney to become a Renminbi (RMB) settlement hub.

"China is our number one trading partner and this development will make it easier for Australian firms to move funds and do business with China," Mr Baird said.

"Securing Sydney as an offshore RMB settlement hub was the focus of my discussions with senior Chinese government leaders in Guangzhou, Shanghai and Beijing, when I visited China in September for my first international mission as Premier.

"The RMB is now the eighth-most traded currency in the world. However, only one per cent of Australian trade with China is currently settled in RMB.

"It's estimated 30 per cent of China's total trade will be settled in RMB by the end of 2015, so today's announcement ensures Australia can take advantage of this major opportunity.

"The decision on the RMB hub reflects three years of hard work to send a message that NSW is open for business with China, our number one trading partner and biggest source of international tourists and visitors," Mr Baird said.

The decision represents a successful outcome from the partnership between the NSW Government and industry on the Sydney for Renminbi initiative in 2014.

Since early 2014, NSW Trade & Investment has been working with industry partners, including Chinese banks in Sydney, as part of the Sydney for Renminbi Working Group, chaired by David Olsson, China Practice Consultant at King & Wood Mallesons.

The working group has focused on demonstrating Sydney's commitment to the growth of the RMB, support the Australian Government's efforts to secure a clearing bank for Sydney, and promote opportunities for direct trade with China using RMB.

China's central bank, the People's Bank of China, has announced that it has appointed the Bank of China, the country's fourth largest lender, as the clearing bank for RMB transactions in Sydney.

Sydney's future as an RMB settlement hub was an important discussion topic at the Sydney-Shanghai Finance Services Symposium held in Sydney this week. A high-level delegation of Australian and Chinese business, finance and government leaders took part in the third annual Symposium.

The Shanghai delegation was led by the Deputy Director General, Financial Services Office, Shanghai Municipal Government, Mr Jun Wu.