China’s foreign reserves rise to $2.4 trillion, up 24 percent over 2008 despite global crisis

China’s foreign reserves rise to $2.4 trillion

BEIJING — China’s foreign reserves, already the world’s biggest, surged 24 percent last year to $2.4 trillion despite the global financial crisis, the central bank reported Friday.

China’s 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.

The reserves grew by $453 billion in 2009, an even faster growth rate than the previous year, the central bank said. The reserves added $10.4 billion in December alone.

China’s reserve growth is driven by its currency controls, which requires Beijing to buy dollars and other foreign currency that flows into the country in order to control the state-set exchange rate of China’s yuan.

China, which overtook Germany last year as the biggest exporter, reported a $196 billion trade surplus for 2009.

Regulators also say foreign “hot money” is flowing into China for speculative investments in real estate and stocks, which the government is trying to stop.

China had $798.9 billion of its reserves invested in U.S. Treasury securities as of October, according to the U.S. government.

On the Net:

Chinese central bank (in Chinese): www.pbc.gov.cn