Friday, March 31, 2006

Money in the bank

By exporting & lending to the US cheaply (and the American consumer willingly), China has amassed nearly 1 trillion in dollar reserves.

From The Economist (March 2006):

China surpassed Japan as the world's biggest holder of foreign reserves. The news came amid more politicking over China's currency policy, which American politicians regard as a cause of their trade deficit. Charles Schumer, a senator who has been shrill in his attacks on Beijing, dropped plans, for the moment at least, to slap a 27.5% tariff on Chinese goods, partly in response to signals from China that it would allow its currency to float more freely.