China's Foreign Exchange Reserves Growth And Export-oriented Economic Structure,

The growing stockpile of sizable foreign reserves by China has been a hot topic and prompted a considerable debate. Based on mercantilism thought, the relation between the accumulation of international reserves and economic structure is researched in the doctoral dissertation. Its core idea is that the excessive foreign reserves accumulation is induced by its permanant mercantilism development strategy and export-led ecomomic structure, and the strategy is not continuable in unreasonable international monetary system.According to Schumpeter Criterion and policy since reform and opening, Neo-mercantilism of China is composed of export-led, exchange rate-peg, exchange management and trade surplus, assisted with other financial and monetary policies such as export promotion import limitation, and centered by trade surplus and based by government intervention. Since the middle of 1990s, FDI (Foreign Direct Investment) inflows promotion and export expansion have been a strategic choice of China. Though having played an important role in growth and employment, FDI inflows and development of improvement trade have brought export-led economic structure of China into being and resulted in excessive reserve accumulation.Since Asian Financial crisis, changes of the size, functions and motives of growing foreign exchange reserves have taken place in China and other Asian countries. Under the influence of double surplus of international payments and imbalance global economy, the self-enforcing growth of exchange reserves has had negative effects on macro-economy. Though being important for macroeconomic stability and crisis prevention, reserves'performing function has a certain amount of conditionality. In general, high reserves can help offset moderately weak fundamentals. However, if fundamentals are sufficiently weak, no level of reserves will be able to counterbalance the weak fundamentals. The global financial crisis triggered by Subprime Crisis has had a great impact on China, and expansionary fiscal and monetary policy implemented by American government will devalue dollar and Chinese dollar reserves. Unfortunately, China cannot hedge against it by adjusting quantity and structure in a short time. To spring itself from the dollar trap and promote the coordinated development of economy, it is pressing for China to reconsider its developing strategies, to expand domestic demand and to increase consumption by speeding up constitutive reform, including the reform of the mechanism for setting the RMB exchange rate, income allocation, and marketing of factor prices, etc, and to advance reform of the international financial system.This dissertation is structured as follows: Chapter One and Chapter Two introduce the background and significance of topics, domestic and foreign research and methods; Chapter Three summarizes growth of foreign exchange reserves of China and primary influence factors; Chapter Four induces the principal theory of mercantilism and the features of Chinese neo-mercantilism; Chapter Five explains how export-led economic structure comes into being; Chapter Six expounds self-reinforce mechanism of foreign exchange reserves growth; Chapter Seven analyzes the relation among foreign exchange reserves, economic structure and financial crisis. The last part is conclusion and policy suggestion.Methodology in this dissertation is composed of hypothetical-deductive method, the combined method of the normative analysis and the positive analysis, and econometrics.