There is, though, much further to travel on this journey. Currently, less than 1 per cent of Australia’s merchandise trade with China is invoiced in RMB. For China, around 12 per cent of total merchandise trade in 2013 was invoiced in RMB, although we estimate the number was around 3 to 5 per cent if trade with Hong Kong is excluded.
These figures suggest that there remains significant potential for growth in RMB trade invoicing, not only by Australian firms, but by firms in other countries as well. Australia’s own experience with liberalisation is that the growth of trade makes financial liberalisation easier. As financial markets develop to support trade relationships, those same markets can, in time, support deeper financial relationships.