SYDNEY -- the Australian Westpac Banking Corp is planning a further expansion into the lucrative China market, after celebrating the opening of its second branch in Beijing on Wednesday.

Westpac plans to open at least two more branches to support its institutional and corporate clients as well as to service the growing number of Chinese companies looking to engage with Australia over the next few years.

Related readings:  NZ's controversial govt banking tender underway  Commonwealth Bank opens first rural branch in China  Asian stocks decline on China reserve ratio plan  Chinese tourists are biggest spenders in Australia

"China is Australia's largest trading partner and the opening of our Beijing branch better positions us to support our customers' trade and investment flows between China and Australia and New Zealand," Westpac Institutional Bank Group Executive Rob Whitfield told Xinhua from Beijing.

"Extending our footprint and increasing our capabilities in China is central to supporting customers in China and the wider region. The increased geographical coverage provided by the Beijing branch is a significant step, enhancing our ability to support customers with business interests in the North of the country."

Australia's "big four" banks have been intensifying competition to secure a foothold in China, with the Australia New Zealand bank (ANZ), National Australia bank (NAB) and the Commonwealth Bank, all jostling for pole position.

The NAB announced this week that it had finally received the green light from the China Banking Regulatory Commission to open its first branch in Shanghai later this year.

Westpac's Shanghai branch, which opened in 2008, within only three years has experienced significant growth in assets and profitability.

In contrast to its Australian competitors, which have looked to the Chinese retail sector, Westpac's Beijing branch will focus on supporting corporate and institutional customers.

The range of services available to customers in Beijing includes foreign currency debt and capital markets products, money market and deposit products, trade finance and foreign exchange.

With China taking a longer term view in its investments, Westpac is pushing hard for a Renminbi license which would allow it to move forward with China's well reported intentions to continue using the RMB to settle contracts.

An official offshore RMB market, launched in August last year, is now worth $65 billion and HSBC predicts it could reach $130 billion by year's end.

China moved in June 2010 to expand a pilot program that enables onshore importers and exporters in 20 provinces to invoice their cross-border trades in yuan. At present about 70,000 companies are taking advantage of the move.

Total cross-border yuan transactions hit $58.7 billion in 2010, 13 times higher than the previous year, China's State Administration of Foreign Exchange said in April.

Andrew Skinner, HSBC head of Trade and Supply Chain, told Xinhua, "Clearly China is now Australia's No 1 trading partner, so nearly a fifth of Australian trade is settled with China. Clearly that's one of the key drivers for RMB. And certainly renminbi is seen to be appreciating versus the US dollar so there's an expectation that it will continue to do that based on the growing trade volumes in China. And interest rates are higher in RMB as well, so that's providing strong growth."

The renminbi is already playing an important role in Australia's international trade.

Andrew Skinner says that HSBC is the first Australian based bank to roll out RMB products to its Australian customers and while Australian companies are seeking the diversity of supplies, the ability to deal with more companies and the mitigation of risk that comes with utilizing the Chinese RMB.

He told Xinhua, "RMB products are providing a number of key benefits, really summarized in three areas, the biggest interest we're seeing is around cost we're seeing five to seven percent costs savings in dealing in RMB because of the currency fluctuation that's built in when trading internationally so clearly the RMB is not as fully traded as yet so we're benefits there."

Whitfield says Westpac is now looking to similarly tap that rich vein of growth.