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News from EPI NewsFlash: China’s Massive Reserves Come at a Cost

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NewsFlash: October 24, 2007

China’s Massive Reserves Come at a Cost

China’s acquisition of $43 billion per month in foreign exchange reserves this year – double 2006’s pace – will help it sustain a record global surplus of $400 billion this year. But how costly will this trend be?

In today’s Snapshot, EPI senior economist Robert Scott explains how the cost of managing the yuan/dollar exchange has become more expensive, and why sustaining this policy will increase these costs in the future for both the United States and China.

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