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Thread: Increase "financial muscles" just for economic purpose?

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[quote=DREAMLIFE,308145]In recent years, China's foreign exchange reserves have increased very fast. At present, China has 1.8 trillion dollars foreign exchange reserves. As IMF expects, the figure will rise by more than another half trillion next year.

With the increase of foreign exchange reserves, some nations have become more concerned about how China will deal with its foreign exchange reserves, especially the US. Because 3/4 of China's foreign exchange reserves is said to be US dollars. The US is afraid of China selling its foreign exchange reserves though some analysts analyse that dumping the foreign exchange reserves will harm China more than that to US.  Even China decides not to sell its foreign exchange reserves, it can use it as a "bargaining chip" to influence U.S. policy.

Pete Peterson, co-founder of the Blackstone Group even uses Eisenhower's Suez Canal diplomacy as an example to illustrate his point. Eisenhower once threated GB that they would dump their reserves of pounds if Brithish government didn't give up Suez Canal. Finally, British government gave up Suez Canal.

In US's view, China increases its "financial muscles" not only for the economic purpose but also for other "special purposes". What do you think of it?

Source: Washington Times.

If you want to know more, you can read this article "Dollar diplomacy". 
Address:http://www.washingtontimes.com/news/2008/jul/29/dollar-diplomacy/[/quote]

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