China’s forex reserves top 1.43 trillion dollars

L to R: Samantha Ranatunga, Chairman, HVA Foods PLC; Jan Müggenburg, Chief Executive Officer, Müggenburg Group; Graham Stork, Chief Executive Officer, HVA Foods PLC; Sarva Ameresekere, Group Chairman, George Steuart & Co. Ltd.

BEIJING, Oct 12, 2007 (AFP) - China's foreign exchange reserves, already the world's largest, surpassed 1.
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43 trillion dollars at the end of September, the central bank said Friday. The figure was up 45.1 percent from a year earlier, the central bank said in a statement posted on its website.
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The news came the same day that the government said the trade surplus, the main source of reserve growth, hit 185.

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7 billion dollars in the first nine months, exceeding the 177.5 billion dollars for all of last year.
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China's forex reserves, which overtook Japan's for the world's top spot in early 2006, have also been boosted by foreign direct investment and the inflow of speculative funds banking on short-term investment gains.
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About 70 percent of foreign reserves is generally believed to be held in US dollar denominated paper, principally US government bonds.

This has proved a less-than-ideal solution, given not just the low yields on government debt, but also the weakening of the US currency.

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To help cope with this problem, the government late last month launched the China Investment Corp.




, charged with managing about 200 billion dollars of the nation's reserves.

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