BEIJING (AP) — China’s foreign reserves, the world’s biggest, rose to a new high of $2.45 trillion by the end of March, up 25 percent over a year earlier, the central bank reported Monday.
China’s reserves increased by $47.9 billion dollars in the first quarter of 2010, $40.2 billion more than that of the same period last year, the People’s Bank of China said on its Web site.
The reserves are closely watched in the United States, which is looking to Beijing to help finance its stimulus spending by continuing to recycle its trade surpluses into buying Treasury securities and other government debt.
It took China a decade to accumulate its first $1 trillion in foreign reserves by 2006 but growth skyrocketed as trade boomed and the total passed $2 trillion last April. It surged to $2.4 trillion by the end of 2009.
China, which overtook Germany last year as the biggest exporter, reported a $196 billion trade surplus for 2009.
Beijing keeps nearly $900 billion of its reserves in U.S. Treasury debt and has appealed to Washington to avoid taking any steps in its response to its financial crisis that might fuel inflation and erode the value of the dollar and Beijing’s U.S. assets.
Premier Wen Jiabao, the country’s top economic official, appealed publicly in March to Washington to take “concrete steps” to reassure Treasury investors.
China is the U.S. government’s biggest foreign creditor but has trimmed its Treasury holdings by several billion dollars in recent months, raising concern that Washington might have to pay higher interest rates to finance its soaring budget deficits.