foreign currency reserve

According to the latest reports from the Financial Times China's State Administration of Foreign Exchange (Safe), Chinese official foreign exchange manager, is still buying record amounts of U.S. government bonds, in spite of Beijing's increasingly vocal fear of a dollar collapse. The story on the paper’s website cited Chinese and western officials in Beijing as saying China was caught in a "dollar trap."

As China is getting more concerned about the profitability of the U.S. treasuries and other dollar denominated bonds its central bank is calling for the eventual introduction of the new international currency reserve to replace the dollar. Zhou Xiaochuan, governor of the People’s Bank of China, stated that a new currency reserve system controlled by the International Monetary Fund could prove more stable and economically viable.