divert forex reserves to BRICs

In the background, another big idea has been gathering support, with much more potential to have an impact soon. A growing number in Beijing are calling for some of the reserves to be channelled to the Bric nations (Brazil, Russia, India and China) and other developing countries. This is not just about snapping up oilfields and copper mines on the cheap, as China has been doing all decade. The stated goal is much bigger: to use the reserves to help stimulate a new cycle of development and trade with the developing world.

The discussion has largely come from China's flourishing think-tank world. Over the summer the economist Xu Shanda, who used to run the federal tax bureau, called for the creation of a Chinese "Marshall plan" to lend money to Africa, Asia and Latin America to boost living standards in those regions and create demand for Chinese products to replace struggling US and European customers...

Hu Xiaolian, deputy governor of the central bank, proposed at a Group of 20 meeting the creation of a "supra-sovereign-wealth investment fund" that would invest foreign exchange reserves in developing countries to allow "these countries to serve as new engines in global recovery and growth". Justin Yifu Lin, the Chinese academic who is now the World Bank's chief economist, said in an interview last week with Caijing magazine that Chinese companies should step up investment in Africa and south-east Asia, including outsourcing some low-end manufacturing, to boost consumer demand.