Regional economists yesterday applauded the government's announcement that foreign exchange reserves stood at US$286.4 billion (HK$2.2 trillion) by the end of last year, a 35 per cent increase on 2001.
They said the nation's rapid rise in foreign exchange reserves was a testament to its economic competitiveness and a sign China had earned a place as the world's manufacturing centre.
'It means external accounts are very healthy,' said Yiping Huang, China economist at US-brokerage house Salomon Smith Barney in Hong Kong. 'There is a lot of surplus.'
The growth rate was the highest for five years, and means China now has the second largest foreign exchange reserves in the world. Japan is in No 1 position with US$450 billion, while Taiwan is No 3 with US$160 billion. Hong Kong is No 4 with reserves of US$110 billion.
Although the mainland's foreign reserves are still lagging behind Japan's, there are increasing signs of the rise of a 'Greater China' economy. Together, the mainland, Taiwan and Hong Kong have foreign reserves of more than US$556 billion, substantially more than Japan.
Sunday's historic flights of Taiwanese chartered planes from Taipei to Shanghai via Hong Kong and Macau point the way to an accelerated integration of the three economies. Combined, Greater China is a formidable export engine few rivals can match.
Although Hong Kong's foreign exchange reserves remained static last year, Taiwan's reserves rose by 23 per cent.
