New Zealand and China Launch Direct Currency Trading on First Day of PM John Key's Official Visit
By Reissa Su | March 19, 2014 3:12 PM EST
New Zealand has signed a currency exchange deal with China on the first day of Prime Minister John Key's arrival in the world's second largest economy. Together with China's Premier Li Kequiang, Mr Key announced the launch of direct trading between New Zealand's dollar and China's renminbi in the Chinese onshore market.
A picture of Reserve Bank of New Zealand dollar notes. September 3, 2012.
New Zealand's prime minister has arrived in Beijing as part of his official visit to China. He was met by Premier Li Keqiang at the Great Hall of the People. Mr Key said he was happy to witness the conclusion of negotiations to launch the trading of New Zealand and Chinese currencies.
Mr Key kicked off the negotiations for the currency deal in April 2013 when he talked with President Xi. He said he was "delighted" to see the project succeed. It only indicates the strong relationship and goodwill between China and New Zealand.
According to Mr Key, the currency deal between China and New Zealand will make doing business with the Asian country easier. It will also lower the cost of conversion and boost trade and investment.
The historic currency deal between the two countries will also strengthen the New Zealand and Chinese financial systems. Mr Key said trade and good between New Zealand and China had totaled $18.2 billion in 2013 which was 25.2 per cent higher in the previous year.
Mr Key declared that China is now New Zealand's top exporter of goods. The New Zealand dollar will be the sixth currency to be engaged in direct trading with the renminbi. Other countries before New Zealand are the Australian dollar, U.S. dollar, Japanese yen, Malaysian ringgit and the Russian rouble.
New Zealand's economy is expected to have significant gains due to big changes in China which will have a big impact to the island nation's future. New Zealand continues to enjoy a strong import growth for goods consumed by the Chinese middle class with a stronger-than-expected rise of 10.1 per cent in February. New Zealand dairy exports continue to show positive growth in China but the same cannot be said for Australian mineral commodity exports.
Since China is New Zealand's biggest importer, the Kiwi economy will stand to benefit from the Chinese government's GDP growth strategy.
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