China has a cash reserve of 6 trillion dollars. Half of this is unaccounted for and hidden. Brad Sester also mentioned that a new threat is emerging for the global economy. The People’s Bank of China, China’s central bank, does not show foreign exchange figures for many countries. Instead, it is recorded in the assets of public sector commercial financial institutions and policy banks. Brad Sester said that this can be described as a ‘shadow reserve’.
In the near term, China’s official currency reserves have remained largely unchanged. But Brad Sester pointed out that China’s hidden wealth, which exports more than imports, is likely to be high. China has the largest foreign exchange reserves among countries in the world. Total cash holdings fell to $3.177 trillion last month after a decline of $2,800 crore. In the month of April, the foreign exchange reserves were 3.205 trillion dollars, according to the official figures released by China.
The significance of this hidden stockpile is heightened when we talk about China’s domestic debt problems. China’s domestic debt problem is often discussed without accounting for this. However, China is still the largest lender globally. And China’s huge foreign exchange reserves can have worldwide influence. The best example of this is the Belt and Road initiative, said Brad Sester.
