Chinese currency’s ascent slow to take off
The US dollar is hard to shift as the incumbent currency in world trade despite the massive growth of imports and exports to China, a conference in Auckland has heard.
Daniel Everett, ANZ’s head of renminbi, strategy and execution, said that while total trade with China from Australia and New Zealand had tripled in the last decade, ‘‘a negligible portion’’ of that trade was in China’s currency, the renminbi.
The conference, organised by Victoria University and the New Zealand Contemporary China Research Centre, has been discussing China’s path from a protected currency to a more liberalised regime and the
''The renminbi is still more challenging to use than other currencies.'' Daniel Everrett
renminbi’s chances of become a world currency.
Everett believed renminbi internationalisation and capital market liberalisation was still important but had slowed as Beijing focused on economic and social stability.
China is the world’s largest exporter but its currency remains far less used.
Everett said it was hard to shift firms away from their comfort with the US dollar. Equally, there was less demand from Chinese firms to use renminbi. Government rules were often unclear or could be interpreted differently from bank to bank.
‘‘The renminbi is still more challenging to use than other currencies. The US dollar is still easier to use. The New Zealand dollar is easier to use,’’ he said.
An ANZ confidence tracker of firms found Hong Kong and Singapore most positive about the renminbi landscape, but oddly China firms were among the least confident.
The attraction for New Zealand and Australian firms in using renminbi for invoicing was the better access to new business opportunities and good relationships with Chinese firms, Everett said.