In a sign of growing economic ties, China allows direct currency trading with New Zealand

WELLINGTON, New Zealand – In another sign of their growing economic ties, China has allowed its currency to be directly traded with New Zealand's.

New Zealand Prime Minister John Key announced the start of trading Wednesday during a trip to China.

Previously, a company that needed to trade New Zealand dollars for Chinese yuan in China had to use a third currency, typically the U.S. dollar.

New Zealand allows open trading of its currency but China has imposed protections. It has previously allowed only five currencies to be directly traded with the yuan — the U.S. dollar, the Japanese yen, the Australian dollar, the Russian ruble and the Malaysian ringgit.

China is New Zealand's largest export market. New Zealand in 2008 became the first developed nation to sign a free trade agreement with China.