ID :
204420
Tue, 08/30/2011 - 14:37
Auther :
Shortlink :
https://oananews.org//node/204420
The shortlink copeid
Currency reform on Swan's China chat list
Federal Treasurer Wayne Swan will be reminding authorities during his trip to Hong Kong and China that market-based currencies in developing countries are among the structural reforms agreed to by the Group of 20 to cure imbalances in the global economy.
China has made no apparent moves to free up its currency, despite a growing chorus of people - including Reserve Bank of Australia (RBA) governor Glenn Stevens - wanting some action from the world's second-largest economy to relieve pressures within the global framework.
Mr Stevens told federal politicians last week a floating Chinese yuan, rather than being pegged artificially low, would benefit everyone.
The treasurer agrees with such sentiments.
"Australia is a very strong believer in a floating currency and is one of the structural reforms required in the global economy, particularly from large developing countries," Mr Swan told CNBC television on Tuesday.
"That is part of dealing with the global financial imbalances."
Mr Swan said China is part of the G20, where developed and developing nations agreed to a global framework for strong, balanced and sustainable growth.
The treasurer is in Hong Kong, where he has been meeting with investors and having talks with the city-state's chief executive, finance minister and central banker, before travelling on to China's largest province and key Australian trading partner, Guangdong.
He is keen to get views on the global economic outlook after recent market turbulence caused by debt and budget problems in Europe and the US, events he concedes will have consequences on Australia's economy, although it was too early to judge the size of these impacts.
The budget will be updated as normal to take into account any changes in the Mid-Year Economic and Fiscal Outlook that is released towards the end of the year, but Mr Swan reiterated that the government remained determined to bring the budget back to surplus in 2012-13 as planned.
"Having a clear and consistent and credible fiscal policy is really important, not just for Australia but elsewhere in the world," he said.
"We have had a demonstration on how important that can be when you look at events on the one hand in the United States and events of course in Europe."
Mr Swan has left behind a growing debate over the future of manufacturing in Australia, sparked by BlueScope Steel's announcement last week that it was axing 1000 jobs and closing its export business, partly in response to the sustained strength of the Australian dollar.
But new economic data released on Tuesday showed the non-engineering construction sector also remains extremely weak.
Australian Bureau of Statistics data showed building approvals rose by just 1.0 per cent, seasonally adjusted, in July to 12,227 units, half the growth economists had predicted for the month, and now stands at a whopping 15 per cent lower than a year earlier.
Housing Industry Association senior economist Andrew Harvey said this 12-month declining trend partly reflects the weak business and consumer sentiment in the non-resource economy, but there is now a silver lining for potential homebuyers.
"Increasingly, the RBA has no option but to either cut rates or keep them on hold for a sustained period, and this in itself would add to the confidence of consumers and prospective homebuyers," Mr Harvey said.
At the same time, builders have had to become competitive, "which means there are some very good buying opportunities for those in the hunt for a new home".
China has made no apparent moves to free up its currency, despite a growing chorus of people - including Reserve Bank of Australia (RBA) governor Glenn Stevens - wanting some action from the world's second-largest economy to relieve pressures within the global framework.
Mr Stevens told federal politicians last week a floating Chinese yuan, rather than being pegged artificially low, would benefit everyone.
The treasurer agrees with such sentiments.
"Australia is a very strong believer in a floating currency and is one of the structural reforms required in the global economy, particularly from large developing countries," Mr Swan told CNBC television on Tuesday.
"That is part of dealing with the global financial imbalances."
Mr Swan said China is part of the G20, where developed and developing nations agreed to a global framework for strong, balanced and sustainable growth.
The treasurer is in Hong Kong, where he has been meeting with investors and having talks with the city-state's chief executive, finance minister and central banker, before travelling on to China's largest province and key Australian trading partner, Guangdong.
He is keen to get views on the global economic outlook after recent market turbulence caused by debt and budget problems in Europe and the US, events he concedes will have consequences on Australia's economy, although it was too early to judge the size of these impacts.
The budget will be updated as normal to take into account any changes in the Mid-Year Economic and Fiscal Outlook that is released towards the end of the year, but Mr Swan reiterated that the government remained determined to bring the budget back to surplus in 2012-13 as planned.
"Having a clear and consistent and credible fiscal policy is really important, not just for Australia but elsewhere in the world," he said.
"We have had a demonstration on how important that can be when you look at events on the one hand in the United States and events of course in Europe."
Mr Swan has left behind a growing debate over the future of manufacturing in Australia, sparked by BlueScope Steel's announcement last week that it was axing 1000 jobs and closing its export business, partly in response to the sustained strength of the Australian dollar.
But new economic data released on Tuesday showed the non-engineering construction sector also remains extremely weak.
Australian Bureau of Statistics data showed building approvals rose by just 1.0 per cent, seasonally adjusted, in July to 12,227 units, half the growth economists had predicted for the month, and now stands at a whopping 15 per cent lower than a year earlier.
Housing Industry Association senior economist Andrew Harvey said this 12-month declining trend partly reflects the weak business and consumer sentiment in the non-resource economy, but there is now a silver lining for potential homebuyers.
"Increasingly, the RBA has no option but to either cut rates or keep them on hold for a sustained period, and this in itself would add to the confidence of consumers and prospective homebuyers," Mr Harvey said.
At the same time, builders have had to become competitive, "which means there are some very good buying opportunities for those in the hunt for a new home".
