Multiple Needs Perspective Of China's Foreign Exchange Reserves Structure

Foreign exchange reserves are the embodiment of national economic strength; it is not only used for daily trade, but also resists the economic fluctuations, or buffer. How much reserves should a country hold and how to decide the foreign exchange reserves' structure are two key questions.In this dissertation, I focus on the structure of foreign exchange reserves, start from the demand of one country for different currencies, according to the three main demand I set up a two-currency model, trying to show that different demand will affect best currency structure, especially the uncertainty of the crisis.The third partⅠpresent the actual situation of China, and analyze the different currency structure of developed country and developing country. Get the conclusion that China should adjust its currency structure according to the real demand of each currency, should not adjust its currency structure just because one or two currencies' depreciation. The fourth part's main topic is about the asset structure of different part of foreign exchange reserves. Too much money is invested in the state-debt or T-bill is not a wise option. We should clearly understand our true investment demand, and distribute our investment according to this. The last partⅠsummarize my opinion and give some political suggestion according to my research.The whole dissertation start from the angle of currency demand, based on the discussion of foreign currency reserves' structure, since the incompleteness of data, I can't do more quantitative research. And because different country has different policies to protect its own resources, best asset distribution way may not be accepted by other country.