Analysis Of Effect On Foreign Exchange Reserves And Countermeasures After China's Entry To WTO

The foreign exchange reserves are one of the important indicators of a country's Economic strength and an important indicator of investigating a country's foreign economic situation. China joined the WTO in 2001 which has a significant impact on China's international balance of payments and brings the new requirements to the issue of suitable scale of the foreign exchange reserves.This paper first introduced the basic situation of China's foreign exchange reserves, then analyses the main reasons of the recent rapid growth of China's foreign exchange reserves followed by the relevant theoretical and practical analysis. We draw the conclusion that the current level of foreign exchange reserves are in excess. In view of the problems , further policy recommendations and solutions are mentioned to enhance China's foreign exchange reserves management.