From The Financial Times (Sub. required):
Chinese RenminbiChina’s foreign exchange reserves increased by just over US$100bn in the first six months of this year to US$711bn, nearly double the rate at which its store of overseas currency rose in the same period last year.
China’s foreign reserves are on track to break US$1,000bn by June next year if they continue to expand at the current rate, according to Stephen Green, an economist with Standard Chartered in Shanghai.
……China’s policies to combat inflation have borne fruit this year, with the National Bureau of Statistics predicting that prices would rise in 2005 by 2.2 per cent, compared with 3.9 per cent in 2004.
Subdued inflation, and the threat of deflation, and moderate credit growth, have convinced many local economists that the time is not right now for a currency revaluation.
However, just as domestic pressures are easing, foreign demands, from the US in particular, are growing for a revaluation.
