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Top Economist Suggest China "Slightly Increase" Dollar Reserve |
What China can do for the world is not to sell out its massive dollar reserve, but slightly increase its hold of the currency to give reasonable support to the U.S. effort to save its economy, said a senior economist here last Saturday. It is indeed difficult for China to handle its huge Forex reserve, as the U.S. currency has already depreciated 20% against the Chinese Yuan, said Cheng Siwei, well-known economist at a financial forum held in Guangdong. "China would suffer from losses if it sells off the dollar, so our strategy should be not to sell, but to slightly increase dollar reserve," said Cheng, also former vice-chairman of the Standing Committee of the National People's Congress (NPC). Cheng made the remarks amid increasing concern that China might use its Forex reserve to finance its RMB4 trillion stimulus plan. China held $1.9 trillion dollars worth of Forex reserve by September this year.
Source: Oppenheimer The Dragon Call November 24, 2008 |
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