Question by Cool Zool: main factors behind reserve accumulation among the emerging economies?
Chinese economy, its large trade surpluses over the years have resulted in very large accumulation of international reserves by China’s Central Bank – according to some figures, it reached over US$ 1.5 trillion in 2007. However, China has not been alone. Many other emerging economies, in Asia and elsewhere, have accumulated large amounts of foreign reserves. Until the global financial crisis, what had been the main factors behind reserve accumulation among the emerging economies?
Best answer:
Answer by Bored Goblin
They are exporting more than they are importing, and the difference is automatically added to reserves. Reserves are like savings essentially – if you get more money than you spend on the international market, you save.
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