I wonder how much China foreign reserves have lost this last quarter? Is there anyone who has info?
There are many ways to diversify China foreign reserves away from T-bills. For example, China should buy a shipping company like DSX or GNK. The total cost is no more than 1b. BTW, I do not own any shares of them. I just feel that Baltic dry index recovered very well last quarter and these companies will trade with much higher prices in three or five yrs. No one can change the trend of globalisation. During normal times, these companies can help chinese trade. During economic crisis, these companies can use their vessels as oil tankers. There are so many good uses of these vessels.
Another way to protect foreign reserves is to use hedging strategies. US dollar was very weak this last month and I expect it to have a nice rebound next month or so. But its long term trend is still down, gradually. Bank of China should prepare how to hedge the risks of depreciating dollars. Do not lose all our foreign reserves. They are people's assets, hardly earned by our beloved Chinese. God bless China!