Study On Scale And Structure Management Of China's Foreign Exchange Reserve

Since reform and opening up, China has encountered two periods of high speed growth in foreign exchange reserves. The first is in the middle of 90's, from 1994 to 1997, as the socialist market economy has preliminary established and foreign exchange management has restructured, foreign exchange reserve in China has finally get rid of gloomy low developed situation, and experienced continually four years high speed growth. The second period started from the beginning of this century and last to now. Recovering from the shock of the Asian financial crisis, China's economy quickly entered the fast development track. Along with that, China's foreign reserve has been back to high speed growth from 2001. At present, China's foreign exchange reserve of more than 1.5 trillion U.S. dollars ranks first in the world.Every coin has two sides. As the rapid growth of foreign exchange reserves, domestic experts begin to worry about the high reserve may do harm to economy. This can be demonstrated in many ways: the suitability of foreign reserve, the return of investment of foreign reserves, high reserve may cause input inflation, and RMB faces severe revaluation pressure. Unfortunately, this trend is going to continue. The huge foreign exchange reserves continued to increase not only aggravated the domestic financial market liquidity surplus situation, hampering the central bank's monetary policy independence, and increase the balance of macroeconomic policies within and outside pressure, but also to the management in foreign exchange.This thesis summarizes the above viewpoint, outline a basic frame, and answer the questions that just mentioned. The first chapter introduces the background and meaning of this thesis, and reviews related papers; the second chapter concludes the foreign exchange reserve management theories, including the definition of foreign exchange reserves, moderate scale, function of the measure and especially, the modeling; Chapter three makes analysis from the size of China's foreign exchange reserves, points out the status of China's foreign exchange reserve management and the existing problems, then put forward some suggestion from policy aspect, these suggestion include: expend domestic demand to simulate citizen consumption, make change to the way of foreign exchange input, improve the quality of foreign enterprise substantially, control direct foreign invest and keep the stability of exchange rate; Chapter four make analyze of the current problem of China's foreign exchange reserve management and advance some advice to polish up foreign reserve structure; According to the front, the last chapter makes comparison of Singapore and Japan on the management of foreign exchange reserves of some experience, come up with some management strategy, for example, shift management level, adopting active foreign exchange reserve management policy, increment investment, separate investment and commission investment.