China's Foreign Exchange Reserves Management

With rapid growth in recent years,the total amount of China's Foreign Exchange Reserve(FER) has achieved 1528 billion dollars.Does China's FER scale fit the demand of economy development and social development? How to manage the huge scale of China's FER? The academic field and the government financial department always concentrate on the series of problems.First this paper describes the course of China's rapid growth of FER and analyses its reasons and mechanism.Then China's FER demand in the near future and it in the long term are discussed with the combination of quantitative analysis and qualitative analysis.It is obvious that the current China's FER scale exceeds the proper limit for its demand in the near future.But in the long term China's demand for FER is huge.Therefore the paper puts forward that China should accumulate FER ahead of time to meet future demand.At the same time it is necessary to reform the current foreign exchange management system and improve FER management level.In order to solve the existing problems in China's FER management system, this paper introduces two main FER management models in the world,namely Norway's portfolio management model and Singapore corperation management model,putting forward the points that can be used for reference.Basing on the development of China's macroeconomy and foreign exchange management system,this paper discusses the suggestions on resolving the rapid growth of FER and deepening the current foreign exchange reform.