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China's foreign reserves exceeded $3 trillion [Copy link] 中文

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Post time 2011-4-15 17:01:28 |Display all floors
China's foreign reserves exceeded $3 trillion

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Post time 2011-4-15 17:04:22 |Display all floors

What the $3 Trillion can buy?

It's an amazing wealth.

China could buy all of the outstanding sovereign debt of Spain, Ireland, Portugal and Greece, solving the euro Area's debt crisis in a trice. and it would  still have almost half of its reserves left over.
China could buy Apple, Microsoft, IBM and Google with $916 trn

Of course any purchase big enough to warrant China's attention will also move the market against it. China can buy almost anything for a price - but almost nothing for today's price.

from economist website.

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Post time 2011-4-15 17:06:02 |Display all floors

Where is it from?

trade surpluses, and flows of capital

(this one post and the following are from several news sources. )

[ Last edited by 468259058 at 2011-4-15 05:08 PM ]

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Why does China reserve so much?

China Resists Yuan appreciation pressure.
Chinese yuan is 4.5% higher than a year ago. By contrast, Singapore's currency has climed 10 percent in that time.

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Post time 2011-4-15 17:10:20 |Display all floors

What's the consequence of the $3 Trillion?

contribute Chinese huge inflation
excess savings in Asia contributed to inflows of capital into the U.S. The investments helped hold down American borrowing costs, fueling a record mortgage boom that ended with a bust that sparked the global credit crisis.
highlight global imbalances that Group of 20 finance chiefs aim to tackle at meetings in Washington.

[ Last edited by 468259058 at 2011-4-15 05:25 PM ]

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Post time 2011-4-15 17:11:50 |Display all floors

What is China doing?

monetary tightening raise bank interest rates.

Chinese officials are reining in lending to counter inflation after a record expansion of credit in 2009 and 2010, with the central bank boosting interest rates four times since mid-October and rasiing banks' reserve requirements.

"We will further improve the yuan formation mechanism and increase yuan exchange-rate flexibility to eliminate monetary conditions that fuel inflation," Wen told China's cabinet this week.

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Post time 2011-4-15 17:23:51 |Display all floors
China as a whole: The amazing wealth measured by the growth of GDP and GNP was created after Deng's reform.

different groups in China:
the amazing public wealth (government-own wealth), such as this Foreign reserve
the amazing wealth owned richest Chinese, such as the soaring number of richest Chinese

however, many Chinese in middle class became mortgage slaves.
1 in 10 Chinese are living under $15 a month.

China's reform in the past 10 years lead to this huge wealth redistribution through the privatization of government-own assets and companies, taxes rule changes, social welfare rule changes ...

"Let a few of Chinese get rich first, later these Chinese lead the rest most of Chinese to get rich together." It's a famous slogan at the beginning of Deng's reform.

Now a few of Chinese get rich, should government continue to transfer the public wealth to them? When would the few of richest Chinese lead the rest most of Chinese get rich?

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