China's External Assets Reach US$1.55 Trillion
According to Fitch Ratings, China’s gross external assets reached US$1.55 trillion at the end of 2006, an increase of US$342bn from 2005. The agency’s estimate takes into account official foreign exchange reserves, direct investments abroad, deposits in foreign banks, portfolio investments and lending to non-residents. The country’s external assets continue to be dominated by official reserves, which were US$1.07 trillion at end-2006, the highest in the world. James McCormack, head of Asia Sovereigns at Fitch, said China is unique among Fitch-rated sovereigns with assets exceeding US$1 trillion, many of which are rated AAA. “In China, most external assets are controlled by the state, thus enhancing the sovereign’s net external position and providing considerable support to the sovereign ratings.” China is rated long-term issuer default A with a positive outlook.