China’s foreign exchange reserves grew by US$40 billion to US$1.797 trillion in May, the Wall Street Journal reported, citing a source familiar with the data. The increase was slower than that reported in April, when a record of nearly US$75 billion was added to the reserves. China’s merchandise trade surplus in May was US$20.21 billion, and foreign direct investment totaled US$7.76 billion. Those numbers left US$12.33 billion unexplained, down from the US$50.2 billion in increases not covered by trade and FDI in April. The reduction is considered a sign that speculative capital inflows, a source of concern for the government, are slowing.
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