China will stop stockpiling its massive foreign exchange reserves according to China's central bank governor Zhou Xiaochuan. In a magazine interview, Zhou said the government will "cut a small piece of reserves" for a new agency to be set up for the management of its massive foreign reserves, which have swollen because of the trade surplus, state media reported. He did not say how much money would be passed to the agency. China's premier, Wen Jiabao, said last week that plans to form a new agency to invest part of the country's foreign exchange reserves, the world's biggest at more than US$1 trillion, would not have an adverse impact on the US dollar, Bloomberg reported.
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