Financial Services Talking Points | 14/06/2017

In today’s talking points: Financial services within Australia accounts for nine percent of the GDP; Australian e-commerce welcoming a new style of payment for Chinese tourists; China continues to open up financial services under a belt and road in Belt and Road initiative; Acceleration in China’s foreign trade.

Australia’s Growing Finance Sector

The Australian Finance Sector has seen significant growth over recent years, becoming the largest share ever of the economy. Financial services within Australia account for nine percent of the GDP within the Australian economy. Kevin Davis, professor of finance at Melbourne University believes that allocating too many resources into the financial sector could potentially slow overall economic growth. The financial sectors of the US, Britain and Canada each represent less than eight percent of their nation’s respective GDP, a little below their sizes before the 2008 crisis. Sally Loane, chief executive of the Financial Services Council, yesterday defended the sector’s stellar growth, highlighting the 420,000 workers it employed.


Chinese payment methods accepted in Australia

As Chinese innovative payment methods such as WeChat Pay and AliPay gain growing momentum in China, Australian start-ups are working to facilitate those payment methods in Australia. One start-up from Melbourne, backed with Chinese funding, allows businesses to issue and pay invoices in their preferred currency at mid-market foreign exchange rate. This not only allows Chinese consumers to enjoy their preferred payment experience in Australia, but also helps drive sales for Australian exporters and retail stores given the ever-increasing numbers of Chinese tourists and students in Australia and shoppers online. Chinese investors will also benefit from the process given Australia’s thriving fintech scene and its overall highly regarded financial regulatory systems.

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China continues to open up financial services under Belt and Road initiative

With the Belt and Road initiative, vice-chairman Jiang Yang of the China Securities Regulatory Commission (CSRC) vows to continue deepening reform and opening up. Overseas, eligible enterprises in countries sitting on the Belt and Road are encouraged to issue panda bonds and to expand mutually-beneficial and practical cooperation. Domestically, CSRC looks to deepen market-oriented reform of acquisition and reorganization and to support eligible domestic institutions to set up branches in countries along the Belt and Road to enhance their global service network. The goal is to perfect the underlying system and promote strict compliance with rules and regulations so as to provide quality financial services for China’s cooperation with other countries along the Belt and Road route.

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Acceleration in China’s Foreign Trade

The acceleration in China’s foreign trade on a monthly basis has brought the boosts in national and global economy. According to the data from the General Administration of Customs, China’s imports in June have grown by 22.1 percent, while the monthly trade surplus shows a slight decrease from that of May last year. This growth is supported by “resilient global demand” of the EU along with solid and constant investment to the market from China’s domestic demand. Although there are challenges to be faced in China’s import prospects such as the trend of a stronger CNY value and “volatility in commodity prices,” China is confident its trade will continue to grow.


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