Can China invest its current account surplus at home?

The amount that China invests at home and the amount of foreign government bonds the country's central bank must purchase are wholly unaffected by the currency that China’s trade is denominated in.

China Financial Markets

The Financial Times ran a very interesting article last week called 'China: Turning away from the dollar'. It got a lot of attention, at least among China analysts, and I was asked several times by friends and clients for my response. The authors, James Kynge and Josh Noble, begin their article by noting that we are going through significant changes in the institutional structure of global finance:

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