China Has $3 Trillion of ‘Hidden’ Currency Reserves, Setser Says
- Lack of transparency in China is a problem for world: Setser
- Nation’s official reserves have flat-lined over recent years
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China is sitting on a $6 trillion pile of money, half of which is “hidden,” and that presents a new kind of risk to the global economy, according to Brad Setser.
A lot of the country’s foreign-exchange reserves don’t show up in the official books of the People’s Bank of China, the former US trade and Treasury official wrote in a report on The China Project, a New York-based news platform. Instead, what can be called “shadow reserves” appear among the assets of entities such as state commercial lenders and policy banks, Setser said.