Australia to invest in Chinese government debt

Australia’s central bank said on Wednesday it plans to invest 5% of its foreign reserves in Chinese government bonds in a move to expand economic ties, the Financial Times reported. “This decision to invest in China is an important one. It reflects the broader economic relationship between China and Australia and our increasing financial ties,” said Philip Lowe, deputy governor of the Reserve Bank of Australia. He said it would provide greater diversification of the country’s investments and would raise an understanding of the Chinese financial markets. Australia joined the US and Japan earlier this month as the third country to establish direct currency trade links with China, having established a currency swap facility with the People’s Bank of China in March 2012.