China's foreign exchange reserves have soared.
In the second quarter of the current year, they rose by $178bn to $2.132 trillion to exceed $2 trillion for the first time.
According to Bloomberg this is a record increase.
On this occasion, the primary cause is not the great surplus of China's exports over its imports.
It's the result of overseas investors identifying China as the strongest of the world's major economies and pouring money into property and into shares: the Shanghai Composite Index has jumped 74% this year.
To put it another way, if international investors want to take an equity risk in these recessionary conditions, they go to China - because its economic stimulus package seems to be working (the annual growth rate in China in the three months to the end of June is said by forecasters to have been not far off 8%; we'll have the official stats, for what they're worth, tomorrow).
Now, the really interesting question is how much of that increment has been reinvested by the Chinese authorities into US government debt, or holdings of Treasury bonds and bills.
China is the largest foreign lender to the US government. At the end of April, China's holding of Treasury securities was $763.5bn (Japan was the second biggest holder, with $686bn).
However, between March and April there was actually a slight fall in the dollar value of Chinese lending to the American government - though that fall was trivial compared with the $261.5bn increase over just a year in the amount of US government bonds held by China....MORE
HT: naked capitalism