China's $3.2 trillion foreign reserve means China is sitting on a volcano. How to manage its ever-expanding national wealth poses a severe challenge to the country.
Against the backdrop of a shaky global recovery, concerns have grown about monetary tightening aimed at controlling inflation resulting in a possible hard landing for the Chinese economy.
China should expand the scale of its sovereign wealth funds to protect its growing foreign exchange reserve.
Since mid-May, the United States has lived on borrowed time as Washington has debated multiple deficit-plans before the Aug 2 deadline.
Inflation may peak soon, but complacency would be risky as economic problems are more structural than cyclical.