Just a few weeks ago, we discussed the Asian Century and what it means to Australian citizens and businesses. The dream took a leap forward as Prime Minister Julia Gillard personally finalised a sweeping diplomatic deal with China last week.
At the heart of this new agreement is an agreement to trade currencies directly. No longer will Australia need to convert its currency into US dollars in order to trade with China. This is a colossal benefit to Australian businesses large and small as they will no longer have to pay for currency conversion.
As China continues to grow at an outlandish pace, its needs are greater than ever. Australia is in the unique position of being able to provide resources, technology, information, and development in all the areas that China requires. We joined other powerful nations such as The United States, Japan, and Brazil in being able to trade currency directly. Our real advantage is that we are close neighbours with a strong cultural exchange due to mutual tourism and immigration.The currency agreement is just the icing on the cake.
Trade relations with Australia have been historically strong, especially since Australia now sends more of its exports to China than any other country in the world. This new agreement strengthens our position as a trading partner.
For years, China has artificially suppressed the value of its currency to make its exports less expensive which has contributed to China’s rise. For years, this has worked but the game is up. As China flexes its muscles, the pressure is on for it to compete with the rest of the world on a level playing field.
China’s currency suppression has generated friction between trading partners, especially the US. The pressure has placed China in the delicate position of needing its currency to appreciate, even as it preserves its hard-earned prosperity. Ultimately, Beijing recognises that it must take steps to compete on a more level playing field if it wishes to continue increasing influence in the world.
Allowing Australia to trade without converting its currency is one way that China is allowing its currency to appreciate slowly. The agreement with Australia is part of Beijing’s long-term strategy to loosen its grip on its economy, allow prosperity to flow in and out of the country, and weaken the position of the US dollar as the global currency of choice.
Australia’s New Advantageous Position
Besides the currency aspect, Miss Gillard also struck a deal to engage annual “strategic dialogue” in three different arenas. Every year, Chinese and Australian prime ministers, foreign ministers, and economic ministers will meet to strategise about the path ahead and plan for our mutual benefit and prosperity.
Besides economic and policy concerns our two nations will work together to address health issues, poverty issues, and damaging diseases such as Malaria and HIV/AIDS in the Asia – Pacific region.
The Asian century is well underway, and Miss Gillard’s diplomatic victory has placed Australia in excellent position to realise the potential of the Asian Century.
Australia has plenty of experience and resources to share as China looks to develop its economy, infrastructure, and technology. We look forward to seeing the cultural exchange that will accompany this landmark agreement.
Anna K. Journalist – Anna is an experienced journalist with a flair for researching Australian current affairs. With her nose always in research and her pen always in action, Anna expresses her interest in the Australia news market through blogging and daily research. Anna has over a decade of experience in journalism, graduating with a major in Journalism and a minor in Communications with honors. For copywriting services and more, visit www.expresswriterteam.com