Questions Assume that you are a Chinese exporter. Would you prefer a Chinese export tariff on selected garment and textile exports as a way to relieve pressure against the yuan or a revaluation of the currency? Why? China has the largest foreign exchange reserves in the world at $1.33 trillion by the end of the second quarter in 2007. This is compared with foreign exchange reserves of about $165.6 billion in 2000. Why do you think their reserves have grown so much in less than seven years? How can that large reserve position help China to manage the value of the yuan? Most of China's foreign exchange reserves are in U.S. dollars, especially U.S. Treasury Bills. If you were an advisor to China's Central Bank, would you recommend they continue that course, or are there alternatives? Case 10-7