Fed vs. China’s Balance Sheet Growth

This graph plots a change in the growth of the balance sheet of the Federal Reserve versus the People’s Bank of China (PBOC) in a percentage of gross domestic product (GDP). In recent years, China has expressed serious concern about the unprecedented growth of the Federal Reserve’s balance sheet and how it may impact the value of China’s over three trillion in foreign currency reserves. It is common knowledge that Chinese trade surpluses generate major flows of dollars back to China. The PBOC purchases foreign exchange entering China. These purchases are financed with the issuance of bills denominated in renminbi.[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]


Source: People’s Bank of China, Federal Reserve, BEA, National Bureau of Statistics, China



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