whidbey

The Importance of China's Foreign Exchange Holdings

"China is such a big participant that any move it makes immediately changes the market price. No single market is big enough for China to significantly diversify into unless it doesn’t mind paying over the odds."

I think this is a reasonable conclusion, but the more salient point is the internal situation that you rightly find more important than reserves and world role. How do reserves related to internal development? There is risk but the goal is worth the risk.

China must manage to realize a stable, peaceful and somewhat successful industrial society. That is a big and expensive process to manage. The foreign reserves it holds are barely equal to a functioning trade relationship with the world. China has no "excess" reserves given its future ambitions (there is the risk too - time). The proper move is to continue to trade with all, build credibility and seek to import the trade disadvantaged goods and services while selling the trade advantaged Chinese goods and services to the world. China needs to mature as a producing nation and find its advantages, then drive hard towards becoming a developed state. With the level of income in the southern hemisphere China has its trade partners well defined. It should move to meet its new partners half way.

Wall Street Breakfast: Must-Know News

Eli you make it work, best wrap-up I get and it is much appreciated.