China Has Enough Cash to Buy Fifth of S&P 500

China's foreign currency reserves hit $2.4 trillion in 2009, which gives the country enough money to buy just shy of 20 percent of the S&P 500, according Standard & Poor's.

The country's reserves jumped 23.3 percent in 2009, Business Insider Reported.

Should reserves continue to grow at such a pace, China could afford to buy half of the index in five years in theory.

Standard & Poor's recently reaffirmed its A plus long-term credit rating on China and gave the country a stable outlook.

The agency based its decision on China's healthy external assets, strong growth and limited debt load, adding China could face “moderate risks” to its balance sheet if the economy slows.

Nevertheless, the country should post a net external asset position that should exceed 120 percent of its current account receipts for 2010.

“We expect this to limit the fallout from further economic or financial shocks,” says S&P's credit analyst Kim Eng Tan, according to Reuters.

Moody's Investors Service recently hiked its outlook for China's A1 credit rating to positive from stable.

Fitch Ratings last year reaffirmed its A plus grade for China, and gave the country a stable outlook.

However, Fitch analysts did say the country is still too reliant on external demand, adding banking assets were losing quality.



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