More Australian businesses using renminbi

The number of Australian companies using renminbi to settle cross-border business has increased substantially over the past year, according to a new business survey.

HSBC surveyed companies transacting with China and found that the proportion of Australian companies using RMB for cross-border business has risen from nine per cent in the middle of last year to 13 per cent currently.

Among companies not using RMB now, 20 per cent said they were planning to settle cross-border business in RMB within the next three years.

Australian business use of RMB is higher than in many larger economies, including the United Kingdom (where ten per cent of companies use it), France (ten per cent), and Germany (seven per cent).

HSBC has forecast that 50 per cent of China's trade will be settled in RMB by 2020.

Banks are positioning themselves to take advantage of this growth. Last week ANZ announced senior appointments to its RMB banking and trading teams.

Lucy Chen moved from OCBC to ANZ to take up the role of global head of RMB transaction banking, based in Shanghai. The bank also appointed new heads of global markets in China and offshore RMB trading in Hong Kong.

ANZ was ranked number one for overall foreign exchange services in the Asia Pacific in last year's Asiamoney FX poll.

Locally, the Australian Securities Exchange and Bank of China launched an RMB settlement service last July. The service allows Australian companies to pay and receive RMB in near real-time in the same way they transact in Australia dollars.

In November last year Australia was appointed an offshore RMB clearing centre and the People's Bank of China appointed Bank of China as the official RMB clearing bank in Australia.

Shortly after, Bank of China and the ASX signed a heads of agreement to expand their strategic co-operation to develop the RMB market.

Around the same time Australia and China signed a free trade agreement.

In February the Bank of China clearing service was launched.

Another recent development has been the Reserve Bank's negotiation of a quota to allow financial institutions based in Australia to invest in approved Chinese securities under the Renminbi Qualified Foreign Institutional Investor Scheme.