Slow growth in reserves

A sharp decline in the growth of China's foreign exchange reserves in the first quarter over the previous one is not necessarily sufficient evidence that the yuan is not undervalued.

But it clearly refutes the accusation that the country is manipulating its currency to increase its trade surplus. US politicians and economists blaming Beijing for undervaluing the yuan to boost its exports should really rethink their argument.

The Chinese central bank reported that China's foreign exchange reserves rose by $48 billion to about $2.45 trillion by the end of March, compared with a $126 billion rise in the fourth quarter of 2009.