COMMENT Last week, China's foreign currency regulator - the state administration of foreign exchange - announced its intention to "optimise the currency and asset structure" of the country's enormous foreign currency reserves and "actively boost investment returns". What, if anything, does this mean? Not much is the best guess. Big changes in policy seem quite unlikely at present.
At the end of last year, China's foreign currency reserves had reached some $800bn (£451bn). This year they are likely to reach $1,000bn. In all probability, China will emerge as the world's largest single holder of official reserves. Moreover, about three-quarters of these holdings are believed to be of dollar-denominated assets.
