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Aussie financial services delegation to visit China in wake of British push

Xinhua, October 29, 2015 Adjust font size:

The fight is on for the Chinese investment dollar as the leader of Australia's largest economy prepares a financial services delegation in the wake of Britain's push for increased China-UK engagement.

New South Wales (NSW) Premier Mike Baird, who's state shares a sister-state relationship with Guangdong, will lead his second business delegation to China in the beginning of November to explore emerging opportunities under the China-Australia FTA, particularly in the financial services sector.

Australia looks set to pass the enacting legislation for the China-Australia FTA by year's end following a political compromise on foreign worker provisions in the agreement which will aid Australia's shift from mining while China's economy transitions to a consumer base.

"When implemented, [the China-Australia FTA] will give Australian and NSW firms an advantage in a very competitive market," NSW Premier Mike Baird said in a statement on Thursday.

The delegation coincidently follows Chinese President Xi Jinping's successful visit to Britain where the UK "made their pitch," highlighting the increased global competition to deepen economic engagement with the world's second largest economy.

James Laurenceson, economist and deputy director of the Australia-China Relations' Institute told Xinhua on Thursday NSW's delegation is absolutely crucial as Britain's main priority is increasing financial services exports to China.

NSW currently accounts for 75 percent of Australia's financial services exports, where those to China increased to 368 million Australian dollars (260.94 million U.S. dollars) in 2014 from 13 million Australian dollars (9.22 million U.S. dollars) in 2010.

"This makes Mike Baird's economic diplomacy crucial," Laurenceson said.

"Finance, particularly outbound investment, has lagged behind trade in China's opening up."

However when outbound restrictions are liberalised there will be enormous potential for financial services investment, Laurenceson said.

It's estimated if China's overseas asset holdings as a proportion of GDP rose to U.S. levels, excluding foreign reserves, their value would increase 12-fold to 30.9 trillion U.S. dollars by 2030.

"Countries and financial centers will be aggressively competing for these Chinese investment dollars," Laurenceson said. Endit