Fool's gold

China''s huge forex reserves reflect the high price of the exchange rate regime.

For a developing country to have over half a trillion dollars in forex reserves could very well be seen as too much of a good thing. A developing country, by definition, needs as much capital as it can lay its hands on. That is especially the case with China, with huge wealth disparities to address, both within cities themselves, and between cities and the countryside.

China has freakishly large $514 billion, second only to Japan on $840 billion but a far higher percentage of GDP, since Japan's economy is almost five times as large.

Yet instead of pouring these billions into critically-needed schools, hospitals, roads, bridges...

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