Australia backs RMB internationalization

Australia supports China's efforts to internationalize its currency, said Australian Deputy Prime Minister and Treasurer Wayne Swan at the sixth Asian Financial Forum in Hong Kong.

"Australia has climbed from the 12th to the fourth in the world for use of the RMB for global SWIFT payments" since it established a high-level dialogue with Hong Kong on renminbi trade and investment last July," Swan said.

"We are also working with China to establish direct trading between our two currencies on the mainland, and we're making great progress," he said.

Swan said Hong Kong is not only an economic powerhouse in its own right but also has a great role to play in RMB internationalization.

Hong Kong was the first offshore market to launch RMB business back in 2004. Now it is the world's largest offshore RMB trading center, processing some 80 percent of RMB-denominated trade settlements, said Julia Leung, a top official from Hong Kong's treasury department.

Statistics from the Hong Kong Monetary Authority show that trade settlement in RMB handled by banks in Hong Kong totaled 1.9 billion yuan in 2011, more than five times the amount settled in 2010.

Hong Kong has many other roles besides acting as the dominant offshore trading center for the RMB, said Hong Kong Chief Executive Leung Chun-ying.

"From a broader perspective, I see Hong Kong as the two-way 'Chief Information Officer' and 'Chief Knowledge Officer' for anyone interested in China," he said.

"From financial services to real estate to social development, Hong Kong is the go-to place for information, knowledge and networking on the mainland," Leung Chun-ying said.

In the meanwhile, Hong Kong can help China to go global by offering an effective channel for mainland investors to branch out and explore overseas markets, he added.

Swan also called for greater cooperation and deeper economic engagement among Asian countries because "our interests and futures are bound together".

Calling Asia "our region", he said there are "vast opportunities to work together to unleash the flow of capital across Asian borders to create more prosperity and to lift more people out of poverty."

Optimistic about Asia's economy, he predicted that half of the world's economic output will be generated within this economic zone in the coming decade.