The new software "has reduced the volatility in our foreign-exchange gain and loss, " Mr. Barrie says, although he won't say by how much.

WSJ: Using Software to Manage Foreign-Exchange Risk

The government would lose money on its huge stash of foreign-exchange reserves but that loss will occur whenever the yuan appreciates and will be bigger the longer today's system continues.

ECONOMIST: China should loosen its currency peg��and quickly

They have also coaxed leading international banks into setting up a global clearing house to reduce the risk of loss should big foreign-exchange trades not be completed as the parties agreed.

ECONOMIST: Lenses of last resort