China has vast foreign exchange reserves of around $1.2 trillion dollars, built up after years of intensive dollar buying in order to keep its currency low and its exports cheap on the world market. However, the dollar is widely expected to continue to fall in the future due to the downward pressure of massive U.S. government debt-- and the Chinese are looking to get rid of as many dollars as possible without accelerating that downward trend by flooding the market with USD.
In the latest show of Chinese dollar redirection and investment, the government-sponsored "Investment Company" bought a $3 billion stake in U.S. private equity firm Blackstone.
More on the U.S. dollar and its future slow (or, alternatively, devastatingly fast) devaluation in a future post.
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