China forex reserves to surpass $2 trillion

Bloomberg

China’s holdings increased 25 percent in the first nine months of the year to stand at $1.906 trillion on Sept. 30. Reserves shrank in Japan and Russia, the nations with the second-and third-largest stockpiles. Russia drained a quarter of its currency and gold assets in less than four months to prop up the ruble, which has dropped 14 percent since June 30. The $2 trillion milestone will "hopefully" be reached this year, Yao Jingyuan, chief economist for the National Bureau of Statistics, said Thursday.

China has been "building liquidity" with reserves increasing by more than $470 billion this year, Morgan Stanley said in a report. "As China goes, so will go Asia."China reported a record $35.2 billion trade surplus last month. Its reserves surpassed those of Japan for the top spot in January 2006.