China is wondering what to do with her trillion dollar reserves

It was just a slight downgrade but China is seeking a better solution to where to put her reserve. Well, S & P did the unthinkable by downgrading the confidence in the US long term treasuries by a single notch but that was enough to make China reassessing as to where to park her foreign reserves which had mushroomed to over three trillion dollars worth. As the Us dollar slides, China's reserve also follow suit and there is no telling how much more it would go downhill. When you have trillions of dollars, it really counts. You would have to wonder how a private body downgrade can do so much damage and for China's case, they have never have this thing before. It is a new game and China is desperately trying to buy insurance. But alas, there is just no near term solution because the fact is that the US treasuries is the world's reserve currency and everyone looks on to it as the reserve of last resort. Neither do the Us government knows how to deal with it. Equally frustrated that a private company can do so much damage, and making a miscalculation at that too, US politicians would want to put right what they have failed to control before.

China is caught in a dilemma. On the one hand, she had made her money on US imports. And on the other hand, she would want to wean herself from the western buyers to concentrate on her domestic markets. But how is she going to get the US equation out of her calculation. Certainly, no other country can buy that much goods from China. There is no viable replacements. Making it more difficult is the debt crisis in Europe. Three quarters of Asia's buyers come from the west and the west is frothing at the mouth. Europe is even talking about bailouts and China has distance itself from being the lender of last resort which she had initially indicated that she would do everything to put out the fire in Europe. The fact is that there is a real case of a cascading effect from European countries, each choosing to get bailout rather then the path of drastic austerity drives. But what good is it that China parks her reserve in the US? Would it not be better to to use her reserve to rescue Europe and to stop the rot and in the final analysis help herself? Yes, China is indeed deep in thoughts. She has never felled into such a situation before. To think of it, she is still considered a developing country as far as the books of the World Monetary Fund is concerned and by right should receive help from the developed countries! But anyway, she is finding her stride as she positions herself as the alternative reserve currency. In that respect, she will have much thing to do, many of which is in discord with a Communistic regime.

One of the often stated way for China is to expand her trade with her Asian neighbors. Since she had succeeded in having a free trade agreement with Asean, the right way is for her is to put more money into resource rich Asean and to integrate her manufacturing prowess with Asean countries. Another good sign is that Asean is a stable economic block now and has the capacity to buy more of those goods that were meant for the west. For perhaps a short time, Asean would be the best place to invest and China would do well to keep talking trade and not war with her Asean neighbors. One of the best place to look to invest is without doubt China Asean Permanent Trade Exhibition Center.