China's $3.26 Trillion Foreign Reserves: Explained

[@6ix.wave.sports]

I watched a similar video, but it mentioned China's $3.5T foreign reserves. Then, I did some research and realized that $3.26T is very accurate! Thank you for your detailed analysis.

[@EconomyExplorer1]

Glad you found the video accurate and informative! Numbers can fluctuate slightly, but $3.26T is the most recent estimate. Appreciate you doing the research

[@CarlosSilva-td3nn]

Excellent!!! Many thanks from Sao Paulo, Brazil❤️🙏

[@EconomyExplorer1]

Our pleasure!

[@RoseMir-o4c]

Good content

[@EconomyExplorer1]

I am glad you like it

[@bukitbatok7332]

China probably has double that amount of reserves.

[@EconomyExplorer1]

Interesting thought! While China’s massive trade surpluses and global investments raise questions, the official figure of $3.26 trillion is what’s disclosed. Without transparency or solid evidence, it’s hard to confirm if the reserves are actually double but it sure fuels the mystery

[@Abcd1234-q4v]

China has been enjoying huge trade surpluses for many years, averaging 800 billion US dollars a year. Yet its forex reserves remains at 3.25: trillion US dollars. Some people suspect that China has more than 3.25 trillion US dollars in its forex reserves, probably another 3-4 trillion US dollars are stashed up somewhere, hidden from public eyes. Likely China has about 6-8 trillion US dollars in its forex reserves but unwilling to show it in its official forex reserves figures. By the end of this year, China's trade surplus will hit 1 trillion US dollars, but its forex reserve will still remain at 3.25 trillion US dollars.

[@EconomyExplorer1]

Interesting perspective! China's trade surplus is indeed massive, but the gap between inflows and official forex reserves can often be attributed to capital outflows, global investments, and strategic diversification rather than hidden reserves. Speculation about trillions stashed away highlights the mystery surrounding China’s financial transparency, but without solid evidence, it's tough to confirm such claims

[@petergreen5337]

❤Well done China. Cooperation is BETTER than conflict.

[@EconomyExplorer1]

Absolutely! China's economic strategy emphasizes global trade and interdependence, which shows that cooperation can drive growth and stability. A strong reminder that collaboration often yields better outcomes than conflict

[@sciagurrato1831]

Accurate and professional - but you should mention WHERE these reserves are held. An enormous amount is in western commercial and central banks. These could be seized - as happened with Russia - at any time and for any reason. Thievery on a grand scale is built into the system.

[@rahulsah6865]

True but the consequences are heavy for US and not China. A currency is valuable only if it provides stability and safety and seizing reserves will prove that the currency is not stable nor it is safe. It's effect can be seen with ceasing of Russian reserve as u mentioned, the world started searching for alternative and for the first time in history the dollar hegemony was challenged and idea of BRICS currency was put forward to other countries making Russian condition as a valid argument. Secondly u can't simply use the ceased currency because it will cause inflation and 3 trillion reserve will cause inflation at an unprecedented scale that it will shatter the economy. Thirdly all of China's reserve is not in dollars and whatever it has it is selling it for gold as shown by decrease in US bond held by China

[@sciagurrato1831]

@@rahulsah6865 your expertise is not in finance so you are focusing on ancillary, rather than primary effects. Seizing/blocking reserves is theft which prevents the true owner of assets from using the assets in the manner intended. A perfect example is what happened to Russia - some of the USD assets were in sequestered escrow accounts intended to pay interest and eventually principal on state borrowings. What happened next? Russia went into default on the bonds as the interest was not permitted to be paid to bond holders. This has an impact on bond ratings and the coupon rates of further borrowings. Moreover, the income from Russia’s holdings in western banks was put into escrow accounts (necessary from a legal standpoint)…but nonetheless the west directed that the interest payments be directed to accounts that were diverted to supplying armaments to Ukraine, So seizing China’s accounts in western banks could be a very attractive way to pay for weaponry for Taiwan - to be used against China. For these and many other reasons, China has long known the danger of western banks - and is proceeding to diminish these balances. And it is, of course, encouraging fellow BRICS members to do the same.

[@EconomyExplorer1]

Great point! China's reserves are indeed largely held in foreign assets, including U.S. Treasury bonds and deposits in Western banks. The potential for seizure, as seen with Russia, highlights the risks of over-reliance on external systems. It’s a stark reminder of the geopolitical vulnerabilities tied to global finance

[@sciagurrato1831]

@@EconomyExplorer1 Bretton Woods enshrined the USD/gold system, but it broke in 1971. A corollary to BW was the ability of the US to act as an honest “custodian” of other nations’ financial assets and equivalents. The equivalents include gold - by the 50s, the US had physically moved the gold from the defeated parties of Germany and Japan to US custody. But not just the losers’ gold. It also holds the KMT gold - which it absconded with when it fled to Taiwan.