CHINA’S foreign exchange reserves have reached US$1 trillion, Chinese State television said Monday, citing sources with the foreign exchange regulator.

“China’s foreign exchange reserves have reached US$1 trillion,” China Central Television (CCTV) reported.

The State Administration of Foreign Exchange confirmed that the reserves had broken through the trillion-dollar mark Monday, making China the world’s largest holder, ahead of Japan.

The reserves hit US$987.9 billion at the end of September and have been expanding at such a rapid pace that they had been expected to surpass US$1 trillion at any time.

An inflow of foreign investment and a continuous stream of hot money looking for short-term speculative gains have helped the reserves reach their current size but booming exports are by far an important factor.

The government has pledged to use the reserves in a responsible manner that will not destabilize global markets.

Some government economists have recommended that China diversify its stockpile of reserves, much of which is parked in U.S. Government debt, away from the dollar to guard against foreign exchange risks.

 (SD-Agencies)