We agree with the Interim Report that the opportunities offered to Australia by the internationalisation of the RMB and the liberalisation of China’s capital account are clear and need to be seized in order for Australia to maintain relevance as a financial centre in the Asian century. We also agree that the Australian government and regulators have taken important steps in the right direction (for example, establishing a bilateral currency swap agreement). That said, we believe that more needs to happen, and with some immediacy, for the benefits of RMB internationalisation to be available for future generations of Australians. In particular, Australia needs to establish itself now as a financial and RMB hub for Asia.
A much higher level of engagement from both the public and private sectors is needed for our current trajectory in Asia to be enhanced. This trajectory must be lifted to increase the awareness of and preparation for the ‘seismic’ event of the deregulation of the China’s capital account and the liberalisation of its currency. Australia’s engagement in this movement must result in:
- the establishment of a clear understanding of the transformational impact which RMB internationalisations and convertibility can have to Australian financial services providers;
- a commitment to taking advantage of the opportunities that are presented; and
- actioning the steps needed to for Australia to be a leader in the global market place and to put Australia at the forefront of RMB market developments.
Our financial services industry has a role to ask our government for what it needs to make all of this happen. Examples of some of the key actions that we think could be initiated immediately include:
- the Australian government taking an active role in the establishment of an RMB clearing bank in Australia, so that the Australian financial system is able to give effect to the RMB clearing arrangements quickly;
- the Australian public sector encouraging, and even participating in RMB denominated investments; and
- support for the export of Australian financial products to China.