Reserve accumulation, amounting to about $ billion per working day in 2006, has more than doubled to above $ billion per working day in the first seven months of 2007. It is well known that reserve accumulation, although partly sterilised, is one of the drivers of excess liquidity and credit growth in the Chinese economy.
In this context, I took note with interest that that Premier Wen, Governor Zhou, and numerous other Chinese authorities, have repeatedly cited the fast growing trade surplus and excess liquidity and investment growth as some of the key domestic imbalances that the country needs to resolve in order to achieve a more sustainable growth pattern. 3 2.