China trade deal extends to finance

The visit of China's president, and progress - not yet detailed - on a trade agreement, yesterday led to a flurry of announcements on banking related matters.

The reported gains in services extend to "the opening up of access to legal, financial, aged care, hospitality, engineering, education and other sectors," ANZ said in a commentary at its BlueNotes portal.

Few details on the trade agreement, labelled a "free trade" agreement, have been released.

Treasurer Joe Hockey announced that central bank governors from Australia and China had signed a memorandum of understanding to formalise an official renminbi clearing arrangement.

Hockey said official clearing banks would provide trading companies with direct means of facilitating cross-border RMB transactions.

Hockey also announced an "RMB Qualified Foreign Institutional Investor (RQFII) allocation of RMB50 billion (A$9.3 billion) for Australia."

This  allocation will provide Australian-based financial institutions with access to Chinese financial markets by allowing approved Australian institutional investors to invest directly in China's equity and bond market.

The Australian reported that Bank of China is expected to have its Sydney branch designated as a clearing bank for trade in renminbi. This would make Sydney one of the few financial centres to host a clearing house for trade in the Chinese currency.

ANZ said it signed two memorandums of understanding that would "extend its relationship with the China Development Bank" and which it asserted "could boost available finance for the development of new mineral resources projects."

National Australia Bank announced the signing of an MoU with Export-Import Bank of China, aimed at developing greater co-operation between the two banks in areas such as foreign exchange trading, project finance, syndicated lending and export credit.

Westpac publicised its position as a "foundational bank to Australasia's first renminbi hub in Sydney."

Australia Post, working through Bank of China, said it would introduce a UnionPay-branded multi-currency travel card.

UnionPay International chairman Ge Huayong said in a statement that UnionPay was investing in the Australian market to expand the company's acceptance network among local merchants.