Study On The Structure Management Of China's Foreign Exchange Reserves

This assay studies the structure management of China's foreign exchange reserves, which refers to the adjustment of the currency structure and the adjustment of assets structure on the basis of the existing size of the foreign exchange reserves. By June 2011, China's foreign exchange reserves had reached $3.1 trillion. With the depreciation of the dollar, Chin's foreign exchange reserve assets face shrinking risk for the dollar. This huge foreign exchange reserves has draw extensive concern.Under the background that western countries did not walk out of the shadows of the financial crisis, the structure of Chinese foreign exchange reserve management which exists many problems and defects needs adjustments. How to configure Chin's foreign exchange reserve currency structure, how to adjust our country's existing foreign exchange reserve assets structure should be desperately in need of research.The main problems of China's foreign exchange reserves structure is its single currency structure in which the dollar occupy the vast majority proportion and its lower profitable assets structure in which assets are mainly invested to government bonds.Foreign exchange reserves mainly meet the needs from four aspects:trade demand, debt service demand, demand of returning Profits to foreign direct investment, and needs to arrange China's foreign exchange rate system.The innovation point is that this assay puts forward new view on currency structure optimization on the basis of reserves' function.Firstly, we can analyze the structure of the foreign exchange reserves considering only one of the factors that influences foreign exchange reserve currency structure. Secondly, calculate these factors' proportion which depends on its influence on foreign exchange reserve currency structure. Finally, we can get the optimized currency structure through simple arithmetical operation according to the data we have connected. On the other hand, This article mainly do research on assets structure from two aspects:the financial assets and non-financial asset. We can analyze the current situation of our foreign exchange reserves'investment direction. Then we can summarize countermeasures in the management of the assets structure.The structure management of foreign exchange reserves is a huge project which needs to be conducted step by step. We should optimize the assets structure constantly, Only in this way, China's foreign exchange reserve can keep its value and play its important role better in our economy.