China's government and central bankers should worry about running out of money. More specifically, it is running down its reserves of other countries' currencies stored up after years of current account surpluses. December's monthly drawdown was the biggest ever. Continued reserve declines reflect an increasingly futile campaign to support the yuan's value. China's private sector takes note and reduces its US dollar-based liabilities. Private companies do not wish to be stuck with debt denominated in US dollars that will be more costly to repay as the yuan sinks.

The yuan's membership in the IMF's list of reserve currencies is a privilege for economically successful countries. It is not an entitlement based on a country's share of the globe's human population or land area. Beijing secured the yuan's status with the IMF after years of publishing very questionable economic statistics that inflated its national track record. Sustaining the yuan's new status requires spending forex reserves to stall its depreciation. Beijing is now in a race against time it cannot win. Its currency reserves will probably run out before it can build both honest statistics and truly consumer-driven economic growth.

The People's Bank of China is now learning the same painful lesson its Swiss counterpart learned in recent years. The difference is that the Swiss tried to drive their currency's value down while the Chinese are holding their own currency up. Switzerland's attempt to suppress the Swiss franc's value was not worth the effort of buying other currencies. Currency market interventions have ruinous effects on central bank balance sheets. Central banks only have so much ammunition to expend in currency wars, and they now fight losing battles against the rest of the world.