As
every coin has two sides, it is also applied in Chinese FER.
With
the Eurozone debt crisis spread to other Eurozone countries violently,
(e.g. from BBC news on Feb 13, 2012, Greek bailout crisis and street violence
has become a main topic among the Euro, further austerity measures about a
130bn euro bailout package was support by EU leaders.) and the US has not
driven out the dark clouds of the debt default risk, Chinese finance ministers
look like ambivalent and complicated, which is a kind of agitated, helpless
and anxious.
As
I have analyzed the liquidity, adequacy and diversity for Chinese FER in last
blog, now I will talk about the annoyance for this large amount capital.
As
we all know, from the $3.2 trillion US bucks, the dollar assets take account of
about 70% (among them 1.16 trillion is US bonds), Euro assets is estimated as
much as 20%. In addition, With the Standard & Poor downgraded
the US Credit Rating to AA-Plus on April 18, 2011, Chinese Government was
seriously worried about the security and capital maintenance (hedging) of the store
reserves as the US Government Bond is the main investment and transaction
products.
Furthermore, China, the largest foreign-government creditor
should claim against the US government to solve out the structural debt
problems and the US Congress to safeguard the National debt investment
security and market well- functioning. So that reducing the volatility to the
international financial markets and realizing diversified
sources of investment strategy within the FER.
In
a short, my conclusion is that:
“The
US kidnap the global economy, and Chinese Foreign Exchange Reserves is the
hostage.”
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