US and Australia commit to bolster Pacific banking as China expands influence
- In Reports
- 10:48 PM, Jul 08, 2024
- Myind Staff
On Monday, U.S. and Australian officials affirmed their commitment to enhancing financial connectivity in the Pacific. This declaration was made as lenders and policymakers from the region gathered to discuss strengthening banking services, amidst growing interest from China.
Pacific Island countries are encountering difficulties as Western banks terminate longstanding relationships with their counterparts in the region's small nations, with some even planning to cease operations. This limits access to U.S. dollar-denominated bank accounts.
“The United States is committed to addressing bank de-risking in the Pacific," told US Treasury Undersecretary Brian Nelson as he acknowledged the problems.
Australian Assistant Treasurer Stephen Jones stated that Canberra aims to be the preferred partner in the Pacific, both in banking and defence.
"We would be concerned if there were nations operating within the region whose principle objective was advancing their own national interest as opposed to the interests of the Pacific Island nations," Jones said on the first day of the two-day Pacific Banking Forum in Brisbane when asked about Chinese banks stepping into the vacuum.
This development occurs as China expands its economic and political influence throughout the Pacific.
China has signed trade and financing agreements with Pacific Island countries, and the Bank of China has offices throughout the region.
In this context of competitive influence, officials from both the US and Australia have yet to announce concrete plans.
At the largely closed-to-media US-Australia co-hosted two-day Pacific Banking Forum, officials' comments appeared to focus on enhancing financial integration and access to banking services.
This is an extremely important focus area to the economic health of Pacific Island countries.
In a virtual address to the meeting, U.S. Treasury Secretary Janet Yellen stated that Washington's focus is on bolstering the Pacific's economic resilience, particularly by improving access to correspondent banks.
"The United States is committed to an Indo-Pacific that is free and open, connected, prosperous, secure, and resilient. A strong and connected Pacific region has benefits for the United States and for the global economy," she said.
Image source: spf.org
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