Implications of China’s Implications of China’s foreign exchange foreign exchange reserves for the global reserves for the global economy economy Andong Zhu Andong Zhu Tsinghua University Tsinghua University New Delhi, India New Delhi, India 2008.1 2008.1
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Implications of China s foreign exchange reserves for the global economy Andong Zhu Tsinghua University New Delhi, India 2008.1.
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Implications of China’s Implications of China’s foreign exchange foreign exchange
reserves for the global reserves for the global economyeconomy
Andong ZhuAndong ZhuTsinghua University Tsinghua University
New Delhi, IndiaNew Delhi, India2008.12008.1
OutlineOutline
The Accumulation of Foreign ReservesThe Accumulation of Foreign Reserves The Sources of Foreign ReservesThe Sources of Foreign Reserves The Costs of Holding Huge Amount of FoThe Costs of Holding Huge Amount of Fo
rexrex What Can We Do with the Foreign ReservWhat Can We Do with the Foreign Reserv
eses Implications of China’s foreign exchanImplications of China’s foreign exchan
ge reserves for the global economyge reserves for the global economy
Implications of China’s foreign Implications of China’s foreign exchange reserves for the global exchange reserves for the global
economyeconomy
For developing Countries:For developing Countries: Another source of Investment Another source of Investment
fund;fund; Another source of borrowingAnother source of borrowing with a more equal with a more equal
relationshiprelationship
Foreign Debt of Developing countries ($):1970-2004
0.0E+00
5.0E+10
1.0E+11
1.5E+11
2.0E+11
2.5E+11
3.0E+11
3.5E+11
4.0E+11
4.5E+11
5.0E+1119
7019
7119
7219
7319
7419
7519
7619
7719
7819
7919
8019
8119
8219
8319
8419
8519
8619
8719
8819
8919
9019
9119
9219
9319
9419
9519
9619
9719
9819
9920
0020
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East Asi a & Paci fi cEurope & Central Asi aLati n Ameri ca & Cari bbeanLow & mi ddl e i ncomeLow i ncomeLower mi ddl e i ncomeMi ddl e East & North Af ri caMi ddl e i ncomeSouth Asi aSub-Saharan Af ri caUpper mi ddl e i ncome
Implications of China’s foreign Implications of China’s foreign exchange reserves for the global exchange reserves for the global
economyeconomy
For developed Countries:For developed Countries: Another source of Investment Another source of Investment
fund;fund; Another source of borrowingAnother source of borrowing A competing lenderA competing lender A competing investorA competing investor
Implications of China’s foreign Implications of China’s foreign exchange reserves for the global exchange reserves for the global
economyeconomy
For the Global Economy:For the Global Economy: Strengthen the bargaining power Strengthen the bargaining power
of the developing countries?!of the developing countries?!