New Zealand officials are in talks with their Chinese counterparts over making New Zealand dollars directly convertible with Chinese renminbi.
Currency convertibility would help traders in both countries as it would remove the need to convert either renminbi or New Zealand dollars into United States dollars to execute import and export transactions.
A spokeswoman for Prime Minister John Key said Key and China's leaders had agreed on the desirability of investigating New Zealand dollar-renminbi convertibility when he was in the People's Republic recently.
"Officials are now progressing the issue," she said. "However, there is no timeframe for concluding an agreement."
She said it took Australia around 12 months to achieve its recent currency agreement with China.
Statistics New Zealand said last week that exports to China rose 26 per cent to $654 million in April from a year earlier.
China has become increasingly important to exporters and receipts have tripled since the nations signed a free trade agreement in 2008.
The Chinese authorities have introduced reforms over the past few years aimed at increasing the use of the renminbi in international trade and investment.
Australia last month became the third country in the world that is capable of trading its currency directly with the renminbi, following the United States and Japan.
China's currency reforms are part of the broad economic reform agenda that has been in place for the past 30 years.
In 2005, the Chinese authorities announced that they would manage their exchange rate against an undisclosed basket of currencies.
This marked the beginning of a period of steady appreciation of the renminbi against the US dollar, except for a two-year pause during the global financial crisis.
Changes "deep within the wiring" of China's foreign exchange regulations are quietly opening up and in the process having a profound impact on the profitability of doing business there, according to Cath Henry, who heads HSBC's global payments and cash management in New Zealand.
"The impact is it will be easier for New Zealand companies to move money in and out of China," Henry said.
"Creating a deeper pool of offshore liquidity is a key plank in its plan to promote the renminbi first as a trade currency, then as an investment currency, and eventually as an alternative to the dollar as a reserve currency.
"But it needs to achieve its aim while guarding against potentially destabilising capital flows, a necessity which rules out a 'big bang' of regulatory reform in favour of a more pragmatic and incremental approach based on pilot programmes."