One thing I don& #39;t think most people know: the US balance of payments data basically shows China& #39;s reserve holdings pretty cleanly ...

(it thus captures the period when China diversified away from the dollar in a fairly obvious way)

1/x

The basic data here is two lines in the bilateral BoP with China (portfolio debt and equity flows). With an adjustment for the "Belgian" holdings to improve the fit. That& #39;s all -- four lines of data.

2/x

For a long time I feared the US data was missing a portion of the flow -- note the gap after the global financial crisis.

But with China& #39;s disclosure that it reduced its dollar share from ~ 80% to ~ 60% between 05 and 14, the gap makes sense ...

3/x

Since 2014 the US data has caught most of the reserve flow -- nothing too interesting

the real question is whether the reserve flow is capturing all Chinese flows ... but that is for another time

4/4