China Has $3 Trillion of ‘Hidden’ Currency Reserves

China’s hidden reserves, estimated at $3 trillion, pose a significant risk to the global economy, warns former US trade and Treasury official Brad Setser. These “shadow reserves” are not reflected in the official books of the People’s Bank of China but are held by entities such as state commercial lenders and policy banks. Despite China’s lack of transparency, its economic influence is undeniable, with these reserves playing a role in funding initiatives like the Belt and Road Initiative. Setser emphasizes that China’s actions, both seen and unseen, will have a profound impact on the world economy.