Monday, January 23, 2012

Enter the Dragon...

...the problem with a dependence on FDI is the mercurial nature of that type of investment.

Jan. 22 (PTI) --
From K J M Varma China's foreign exchange
reserves amounting to over USD 3 trillion declined for the
second straight month in December, snapping the trend of years
of accumulation.
Chinese lenders bought USD 142.5 billion on behalf of their
clients in December, while they sold USD 157.8 billion, marking
the second monthly deficit, China's State Administration of
Foreign Exchange (SAFE) said in a statement.
The December deficit stood at USD 15.3 billion, up from USD
800 million in November.
China sits on the world's largest forex reserves.
The SAFE data came after the central bank had said earlier
this month that the country's yuan funds outstanding for foreign
exchanges fell to 25. 36 trillion yuan in December.
Analysts said the deficit, like falling yuan funds, is a
result of a narrowing trade surplus, a slowdown in the growth of
foreign direct investment and weakened expectation for yuan's

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