glenn stevens : remarks at the launch of the official australian renminbi clearing bank remarks by mr glenn stevens, governor of the reserve bank of australia, at the launch of the official australian renminbi clearing bank. sydney, 9 february 2015. * * * premier, consul general, mr chen, distinguished guests, colleagues, ladies and gentlemen, thank you for the invitation to say a few words on the occasion of the launch of the bank of china ( sydney ) as the official renminbi clearing bank here in australia. today ’ s events mark an important step in the further development of a local renminbi – or rmb – market. but more than that, they mark one more step in a lengthy and very important journey that has seen the flowering of trade relations between china and australia, and which promises benefits from the maturing of financial ties. on its own, the key direct benefit of the official australian rmb clearing bank is that it can more efficiently facilitate transactions between australian firms and their mainland chinese counterparts using the chinese currency. bank of china ( sydney ) ’ s “ official ” status – which was granted by the people ’ s bank of china ( pbc ) – affords it more direct access to the chinese financial system, with flow - on effects for local financial institutions and their customers. but an official australian rmb clearing bank also confers some indirect benefits on the australian financial sector and its customers, particularly when viewed as one element of a broader range of initiatives. in particular, the establishment of the clearing bank helps to raise awareness among australian firms that the local financial system has the capacity to effect cross - border rmb transactions on their behalf. this is important, because over the long run, chinese firms may increasingly wish their trade with australian firms to be settled in rmb. to be sure, today the bulk of global trade is settled in us dollars. but with china now a very large trading nation, and continuing to grow into a “ continental sized ” economy, it would be surprising if at some point we do not see much more use of china ’ s currency for trade purposes. already its usage is growing quickly, if only from a small base. so australian firms and the australian financial system need to be well prepared. to that end, the rba has been directly involved in several initiatives, with the aim in each instance being to ensure that there are mechanisms in place that allow the private sector to increase its use of the chinese currency as and when it chooses

since the early 1990s. between 1995 and 2003, real annual gdp growth in the u. s. has averaged 3. 3 % compared to 2. 2 % in the eu - 13. this sustained growth gap suggests that there is a structural dimension to the seemingly cyclical question of why the eu recovery is so weak. measurement discrepancies account for some of the gap between official growth statistics in europe and the united states. these discrepancies emanate from different sources of data, from differences in the scope of measurement and from different ways in which prices and hence price deflators are measured. price measurement differences exist in the quality adjustment of prices ( hedonic pricing ) and in the pricing of services in trade and finance as well as in non - market sectors like education and health. in addition, the measurement scope itself can vary. an example is the treatment of military expenses which are categorized as investments in the u. s. and as current expenses in the eu. finally, data source issues are particularly relevant in the technology sector. in the eu, software investments are derived from typically conservative corporate accounts. in the u. s., software investments are estimated directly from software expenses. these measurement issues are well known amongst economists on both sides of the atlantic. nonetheless, i am struck by how little attention they receive in comparative economic discussions. with increasing focus on data measurement synchronization, measurement differences are fortunately on the decline in cross - country comparisons of national income accounts. nonetheless, such see e. g. imf world economic outlook april 2005, chapter iii. measurement issues currently explain between 0. 5 and at most 1 percentage point of the growth differential between the eu and the united states. 2 we should consider the upper limit of this range as a litmus test to the question of whether there is a structural growth differential between the eu and the united states. in addition to various measurement differences, about one percentage point of the difference in real gdp growth rates between the eu and the u. s. can be attributed to the higher growth rate of labour input in the u. s. for the period between 1980 and 1995. this is attributable to a stronger increase in the working population in the u. s. and a marked relative decline of effective working hours in the eu. factors causing this decline in individual labour input can be divided into two categories : first, numerous rigidities in european labour markets were introduced over the past decades : working hour restrictions