Study On The Foreign Exchange Reserve Management Of China

Foreign exchange reserve is the main part of the International Reserve. The management of foreign exchange reserve is not only related to one country' ability to adjust the Balance of Payments and keep a stable exchange rate, but also to the sustainable development of economy of a country. The foreign exchange reserve has been developed very fast since the reform of the system of the foreign exchange management in 1994 in China. The total amount of it has surpassed 100 billion US dollars in 1996. In 2003 it has a rapid growth and until now it has surpassed 300 billon US dollars. How to improve the management of such a huge sum of Foreign exchange reserve?The paper is try to do a research of the quantity and structure management based on the development of the Foreign exchange reserve in China. Based on the rational reserve scale theory and international indicator, the paper analyzes the scale of the foreign exchange reserve by descriptive and quantitative analysis. Then the paper tries to makes a deep research for the mission of national management of the foreign exchange reserve and national policy by analyzing the advantages and disadvantages of huge sum of foreign exchange reserve. On the other side, based on the analysis of the present situation, the paper tries to give suggestions for the reserve currencies and asset's management referring to the principle and methodology of international foreign exchange reserve management.