The Scale Of China's Foreign Exchange Reserves Over Study

Chinese foreign exchange reserve has increased rapidly since 1994. By 2003, FER is the second place in the world, less than Japan, and the number is $300 billion. This phenomenon makes scholars and practical department think such problems like: Whether our FER scale is excessive? Why our FER has increased so rapidly? Whether the excessive FER has the negative effect to economic increase? How to manage and invest in order to get best effect?The paper has four parts, the main points as follows:Part one analyses the basement of our FER on the point of balance of payments. Then, I get conclusions as our FER comes from the balance of payments double-surplus and a large part from current account. Part two makes use of popular methods to analyze our foreign exchange reserve scale and get the conclusion that our FER scale is excessive. Part three analyzes the institution and economic reasons of excessive FER scale and the influence to our economy. Part four puts forward of some suggestions.