Management Of Surplus Foreign Exchange Reserve In China

As the main part of international reserve, foreign exchange reserve is a significant macroeconomic variable reflecting one country's economic and financial power. By the end of 2007, the total amount of foreign exchange reserve in China has reached 1530 billion USD, outclassing any other country in the world. On one hand, the rapid growth of foreign exchange reserve indicates that the economic status of China is elevated and the ability of resisting international financial risks is strengthened. But on the other hand, it also brings great challenges to our management. This paper mainly researches on the situation and management of surplus foreign exchange reserve in China.The composition of this paper is that:In the first part, the optical scale of surplus foreign exchange reserve in current China in the end of 2007 is analyzed through Ratio Approach and four-factor analyzation, and then the reasons of formation of surplus foreign exchange in current China, and the positive and negative impacts of surplus foreign exchange in current China is discussed at last.In the second part, the internal and external surroundings what are faced in management of surplus foreign exchange reserve in current China are discussed, and the relative factors are analyzed.The third part analyzes international experiences in management of foreign exchange reserve.The forth part discusses the system of management of surplus foreign exchange reserve and the operation of SIC (State Investment Company).At last, the author analyzes the current complicated situation, and outlines that the main aim in management of surplus foreign exchange reserve is that balanced development of macro-economy and optimization of industrial structure. Meanwhile, the author offers some ideas about management of foreign exchange reserve in the future.