His argument is that large reserves do not protect from economic problems. This is in response to Friedman's assertion that the Chanos analysis is wrong because

His argument is that large reserves do not protect from economic problems. This is in response to Friedman's assertion that the Chanos analysis is wrong because despite excess capacity, China can use its currency reserves to stave off recession, which isn't true. In the article he states explicitly that large reserves do not necessarily cause economic problems.