China holds 30% of world forex reserves

China's foreign exchange reserves hit 2.4 trillion US dollars at the end of 2009, accounting for more than 30 percent of the world's total.

The State Administration of Foreign Exchange says China's forex reserves in 2009 increased by more than 23 percent year-on-year.  China continued to be the world's biggest stake-holder of foreign reserves for the fourth consecutive year amid the global economic recovery.

BRIC countries - Brazil, Russia, India and China - account for 3.3 trillion US dollars, or 42 percent of total reserves. While the G7 countries have just 1.2 trillion US dollar reserves.

Seven of the world's top ten reserves countries are from Asia.

The United States holds 45 billion dollars in reserves, making it only slightly richer than Nigeria.

For China, creating an investment portfolio for its massive reserves has always been a critical task. It has been trying to diversify holdings from the US dollar to alternative currencies and shifting investment from concentrating on foreign treasury bonds to international enterprises.

According to the New York Times, China spent 9 billion US dollars buying into top US firms during the worst of the financial crisis in 2008.

Tang Min, Deputy Secretary General of China Development Research Foundation, said, "We should increase overseas investment and turn our foreign exchange reserves into assets. But we must be extra cautious about the investment, because it could be risky. I also suggest we convert the reserves into wealth for our people and enterprises. Then the reserves can still remain national assets."

It took China a decade to accumulate its first one trillion US dollar reserves by 2006. But growth skyrocketed as trade boomed, and the reserves exceeded 2 trillion within three years.