MercoPress. South Atlantic News Agency

China’s international reserves at a record 2.13 trillion US dollars

A massive influx of financial capital has been more significant for China than trade surpluses since the global crisis broke out.

China's foreign exchange reserves reached 2.13 trillion US dollars by the end of June 2009, up 17.84% year-on-year, according to the latest release from the People’s Bank of China, PBOC.

In the first half of 2009, China's forex reserve increased by 185.6 billion US dollars which is 95 billion less than in the same period of 2008. In June, China's forex reserve increased by 42.1 billion US dollars, 30.2 billion higher than last June. At the end of June the US dollar was equivalent to 6.8319 Yuan.

Chinese exports plummeted 21.8% in the first half of 2009, --the sharpest decline in a decade-- following the global financial crisis that restricted demand for Chinese goods. Falling exports drove the trade surplus to 96.94 billion USD in the first half of 2009, down 1.3% year on year.

However Chinese economists and international money experts say that the increase in forex is the result of overseas investors identifying China as the strongest of the world's major economies and pouring money into property and shares. China's main stock index, the Shanghai Composite Index, has jumped by 74% this year.

Meantime there are signs that China's economy is recovering from its recent slowdown as a massive government stimulus package takes effect.

Property prices, investment, bank lending and retail sales have all picked up.

But some economists fear that the budding recovery could trigger new bubbles in bank lending and real estate.

China is due to release economic growth data for the second quarter on Thursday.