The (almost) $2.5 trillionaire …

The (almost) $2.5 trillionaire …

The (almost) $2.5 trillionaire …

Brad Setser, that inimitable researcher, says:

The world’s sovereign wealth funds almost certainly have less money than is commonly thought. And China almost certainly has even more money than is commonly thought — or at least more money than is commonly reported.

That is the conclusion I have reached after spending a fair amount of time looking at China’s data, and nearly as much time trying to understand the (incomplete) data from the Gulf. The data from China’s 2008 net international investment position — English data through 2007 here — certainly didn’t prompt me to change my mind.

If China’s own reporting is to believed, China’s state likely has about $2.4 trillion in foreign assets — setting the CIC aside. $1.946 trillion in formal reserves. $252 billion in portfolio debt (likely held primarily by the state banks, though some may be stuffed in other accounts). And $186 billion in a mysterious line item that corresponds with the banks dollar reserve requirement and the PBoC’s other foreign assets (see below). Add in the CIC (which likely has another $50-100b in assets scattered across various balance of payments categories) and China’s net international investment position (NIIP ) data suggests that China’s investment in the world — even excluding FDI by Chinese state firms — is now close to $2.5 trillion.

 



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