1. It isn't China that is proposing to cut its foreign reserves. It's the Chairman of the "China Everbright Group" (whatever that is), and the governor of the central bank of China. What he says isn't necessarily China's policy because historically there has been tension between the central banker, which wants to use monetary policy to manage China's economy but has his hands tied because of the influence of the exporters who want to keep the Yuan closely pegged to the Dollar.
2. China doesn't just hold $3T in USD holdings. No, it has $3T in foreign reserves, which isn't all USD holdings.
China's actual policy may be completely different from what the governor of the central bank has wanted for many years.
Comments
The title is misleading in multiple ways:
1. It isn't China that is proposing to cut its foreign reserves. It's the Chairman of the "China Everbright Group" (whatever that is), and the governor of the central bank of China. What he says isn't necessarily China's policy because historically there has been tension between the central banker, which wants to use monetary policy to manage China's economy but has his hands tied because of the influence of the exporters who want to keep the Yuan closely pegged to the Dollar.
2. China doesn't just hold $3T in USD holdings. No, it has $3T in foreign reserves, which isn't all USD holdings.
China's actual policy may be completely different from what the governor of the central bank has wanted for many years.