PM Set To Sign Yuan Conversion Deal In China


Right now, Australian companies doing business with China need to pay to convert currency in US dollars or Yen before they can swap it into Yuan.

That may be about to change though as a deal is on the horizon that would get rid of the spread between the buy and sell rates, meaning savings for Australian companies.

Julia Gillard is going to China next weekend, and it looks like she is going to sign a deal that allows the Australian dollar to be converted directly into Chinese Yuan, according to a report by Rowan Callick at The Australian.

Earlier this week we reported that Australia’s former ambassador to China Geoff Raby saw no reason for Australia not to become a Renminbi clearing center.

Raby also said that direct conversion of the Yuan would be good for Australia’s services sector as it increasingly caters to cashed-up Chinese tourists, a product of that country’s growing middle class.

The ability to directly convert the Yuan (also referred to as Renminbi) is listed as a priority in the Labor Government’s Asian Century Whitepaper.

The Australian has reported that the Prime Minister will ink the deal in Shanghai, before she goes to the Boao Forum, which is intended to be an Asian version of the World Economic Forum.

Now read: Geoff Raby: Chinese Visitors Are Only In Sydney To Play

NOW WATCH: Money & Markets videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.