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After increasing relentlessly for two decades, China’s foreign exchange reserves started to decline about a year ago, and during the crisis month of August 2017 they plummeted alarmingly. Seen by many investors as a signal of waning confidence in the credibility of Chinese economic policy, a collapse in the reserves is now taken as one of the prime reasons to dump risk assets on a global basis. As the balance sheet of the PBOC shrinks, investors fear that “quantitative tightening” will be triggered in developed bond markets, and worry that a credit crunch will occur in China itself. 在连续不停地增加20年之后，中国的外汇储备在大约一年前开始减少，在2017年8月的危机期间以令人震惊的幅度下降。在许多投资者眼里，这是市场对中国经济政策可信度的信心在降低的标志，中国外汇储备大幅减少现在被列为在全球范围抛售风险资产的主要原因之一。随着中国央行(PBoC)资产负债表缩小，投资者害怕这将在在发达国家债券市场触发“量化紧缩”，并担心中国自身将发生信贷危机。 These concerns are not entirely without foundation but a confidence run on the renminbi is still unlikely. Much will depend on whether the Chinese authorities can shed their cloak of secrecy sufficiently to lay out a clear strategy for the reserves, the exchange rate, monetary policy and the necessary clean up in the domestic banking system. If the right strategy emerges, confidence can be restored, because China is very far from being an insolvent nation. | 
