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Foreign reserves up to $2.13 trillion

Updated: 2009-07-20 07:51
(China Daily)

Foreign reserves up to $2.13 trillion

China's foreign reserves have risen to $2.13 trillion after growth picked up in June despite a slump in trade, according to Xinhua News Agency reports.

The reserves, already the world's largest, grew by 17.8 percent, or $186 billion, over the first half of the year, according to China's central bank.

The increase in June alone was $42 billion, nearly equal to growth for the full final quarter of last year, the central bank reported.

China's reserves have ballooned as the central bank buys up dollars generated by its huge trade surplus and an influx of investments.

The latest upturn despite a trade slump suggests the difference was being made up by an increase in foreign investments flowing into China.

China's reserves are more than double those of No 2 Japan, which has $988 billion.

Chinese leaders have expressed concern about the stability of the US dollar and the value of Beijing's vast holdings of American government debt.

China is the United States' biggest foreign creditor and is believed to keep almost half of its reserves in US Treasury notes.

Despite such concerns, the US government said Beijing is continuing to buy substantial amounts of US Treasury notes.

Meanwhile, China's exports fell for an eighth month in June, plunging 21.8 percent from a year earlier.

China's global trade surplus narrowed to just $8.2 billion -- the second-smallest gap in many years.

China added just $7.7 billion to its reserves in the first quarter of this year, citing the plunge in trade and investments due to the global financial crisis.

The $7.7 billion addition is in contrast to a $45 billion increase in the final quarter of last year.

The growth in reserves over the first half of 2009 was down by $95 billion from the expansion in the same period last year, the central bank said.

Xinhua - AP

(China Daily 07/20/2009 page7)

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