China’s $1.2 Trillion Windfall Quietly Seeps Into Global Markets
Bloomberg.com • • business
Key Points:
- China recorded a historic trade surplus last year, totaling $1.2 trillion, significantly boosting its foreign earnings.
- Instead of the central bank retaining most of these earnings, about two-thirds of the foreign assets were acquired by companies, individuals, and state lenders.
- This shift means that a large portion of China's foreign assets are now held outside direct government control, increasing the risk of sudden capital outflows.
- The potential for capital reversal is heightened in a context where the yuan is permitted to appreciate in value.
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