POST COLD WAR WORLD
RISE OF CHINA
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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China is saving more domestically
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China is investing more internationally
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Either A or B
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None of the above
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Detailed explanation-1: -A rise in foreign exchange reserves increases both liquid and total debt, while shortening debt maturity. To the extent that interest rates of foreign exchange reserves are low, an increase in foreign reserves also leads to a permanent decline in consumption.
Detailed explanation-2: -Why Are China’s Foreign Reserves So Large? China is a net exporter of goods, with much of that foreign trade being conducted in U.S. dollars. Chinese companies thus receive U.S. dollars but must convert them into Chinese currency via the banking system. The banks then reconcile these with the central bank.
Detailed explanation-3: -In the long-term, the China Foreign Exchange Reserves is projected to trend around 3180000.00 USD Million in 2024, according to our econometric models. In China, Foreign Exchange Reserves are the foreign assets held or controlled by the country central bank. The reserves are made of gold or a specific currency.
Detailed explanation-4: -China’s foreign exchange reserves dropped more than expected to $3.055 trillion, in August, according to the official data. China’s forex reserves dropped as the dollar climbed against other major currencies.