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China Passes Japan in Foreign Exchange Reserves
HONG KONG, Wednesday, March 29 — China's reserves of dollars and other foreign currencies hit $853.7 billion in February, an official Chinese newspaper said on Wednesday, allowing China to overtake Japan as the world's largest holder of foreign exchange reserves.
Japan's purchases in foreign currency markets to hold down the yen have been controversial for a quarter of a century. China's larger purchases to hold down the value of the yuan have caused similar anxieties from Washington to Brussels.
China Business News, a newspaper with close links to the government, reported that China's foreign reserves rose to $853.7 billion in February, from a previously announced total of $818.87 billion in December.
Japan, which has been doing little intervention lately, had previously reported $850.06 billion in reserves in February, barely up from $846.90 billion in December.
The latest figures show that the growth rate of China's reserves has slowed considerably in the last year, as speculative flows of money into China have faded, and that much of the remaining inflows reflect China's large and growing trade surplus.
Some economists contend that China's reserves effectively passed Japan's last year because more than $60 billion in reserves has been transferred to banks as swaps and injections of capital, with the money remaining partly under the control of the country's currency reserve managers.
The International Monetary Fund requires member countries to disclose their foreign reserves regularly, but China's central bank has frequently lagged in officially disclosing figures. Instead, the figures often appear first in official newspapers, with no comment from the central bank, and are officially released days or weeks later. |