At This Stage Of China's Consumer Relations And Foreign Exchange Reserves

In last three decades of reform and opening up, along with China's accession WTO, Chinese economy is developing in rapid pace, making remarkable achievement. The economic scale was expanded and industrialization process was put forward. However, national economy growth is seriously unbalanced. The excessive dependence on investment and exports led to severe shortage of consumer demand. At the same time the scale of China's foreign exchange reserves are constantly expanding, not only causing huge costs on foreign exchange reserves management, but also inflationary pressure. Study of the relationship between consumption and foreign exchange reserves has great significance in promoting consumption, adjusting the relationship between internal and external demands, and leading national economy developed in healthy and stable way.Based on the development process of consumer demand and foreign exchange reserves, this thesis will mainly discuss the basic characteristics of household consumption and the main features of foreign exchange reserves and analyze the internal relations between household consumption and foreign exchange reserves growth. Through the establishment econometric model and Diamond model, the analysis will discover the link between consumption and foreign exchange, factors restricting household consumption in China, and address practical policy recommendation to expand domestic demand, promote household consumption, and maintain the foreign exchange reserves in a appropriate scale.