The Australia-China Economic Tie-up Was Just Strengthened With Westpac Opening In the Shanghai Free Trade Zone

(Photo by Scott Halleran/Getty Images)

The Shanghai free trade zone (FTZ) is China’s grand experiment, it’s an economic policy incubator where it can gradually implement economic reform in a controlled environment. It is a brilliant idea enabling Chinese authorities to road test policy in the FTZ before they release it into the “wild” of the full Chinese economy.

The FTZ is also an opportunity for Australia’s financial sector – freshly minted by the free trade agreement as having special access – to be part of this experiment and cement Australian financial ties with our biggest trade partner.

So news overnight that Westpac has followed through with its April announcement of the establishment of a branch in the FTZ goes a long way to strengthening what is already becoming solid inter-country financial linkages.

While it might sound like an ad for the bank Westpac’s CEO of its Institutional Bank, Rob Whitfield’s comments are on the money in terms of the economic impact of the move.

Whitfield said:

The closer economic relations built between the Chinese and Australian Governments last month reinforce the strategic value of the Shanghai FTZ. Westpac is well positioned to help customers capitalise on the increasing trade, investment and capital flows, being one of the first banks in Australasia to connect with the RMB Hub in Sydney, as well as our leadership in supporting CNY/AUD foreign exchange flows in China.

Indeed they do but they also position Australia, the economy and the financial sector to remain top of mind and at the forefront of China’s capital market and economic liberalisation.

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