Statistical agencies usually are not the authoritative source of information on a country’s reserve portfolio.  Nor do they usually comment on exchange rate policy or the investment decisions of a country’s firms.  But then again China may be different.    

There is no doubt that China would love to see its companies invest more abroad, slowing its reserve growth.    And China clearly has figured out that buying an asset that is likely to decline in value has a cost, even if the carry is positive.   That said I am more confident that the RMB will rise in value v. both the euro and the dollar over time than I am that the euro will rise (further) in value v. the dollar. 

It does seem like the amount of noise about China’s reserves has picked up recently (hat tip Macroblog).  I don’t think it is entirely random noise either.  I suspect – without knowing – that there is an active debate inside China’s leadership about Chinese reserve growth.

A trillion dollars is just a number.  But it is a big number.  And a big milestone.   By my count China already has over a trillion dollars in reserves and reserve-like assets.  But I am counting the funds the PBoC shifted to the state banks.   In a couple of months, though, China will formally announce that its reserves now top a trillion dollars.   So it isn’t exactly a surprise that Chinese policy makers would be spending a bit of time thinking about how to use those funds.