Beijingâ??s foreign reserve holdings have surged through the $2,000 billion mark, as money pours back into China to take advantage of faster economic growth and rapidly inflating asset prices.
The Peopleâ??s Bank of China, the central bank, announced on its website that foreign reserves reached $2,132bn at the end of June after a rapid accumulation of funds in the second quarter.
The reserve build up in the second quarter was $177.9bn, including a monthly record in May of $80.6bn.
The quarterly figure far outstrips Chinaâ??s trade surplus and inbound foreign direct investment for the same period, proof that the accumulation of funds inside the country is being driven by other factors.
The latest figures also represent an abrupt reversal of an emerging trend of the previous two quarters. Foreign reserves increased by just $7.7bn in the first three months of the year, and $40.4bn in the fourth quarter of 2008, as foreign firms sent profits home and banks demanded repayment of loans.
