China's Foreign Currency Reserve Assets Of The Empirical Analysis Of Structural Optimization

The sustained surplus in the balance of payments led to the rapid increase of China's foreign exchange reserves in recent years. As December 2010, China's foreign exchange reserves reached 2.8473 trillion U.S. dollars, top of the world. Despite the high foreign exchange reserves play a stabilizing role in our economy, but also bring greater risks and negative impact on the economy. Appropriate measure of whether a country's foreign reserve is appropriate depends on not only its size, but also needs to look at its structure. China's foreign exchange reserves is mainly in the form of U.S. dollar asset, it may be threatened by Sino-US relations and U.S. domestic economic policies because of the single structure of currency and asset at any time.This article entropy model applied to the foreign currency reserve assets of the "risk - benefit analysis framework" to construct an optimization model of foreign exchange reserves. Using this model, the use of 2005.4-2010.12 months of monthly data, the structure of the foreign currency reserve assets of empirical research, obtained under the constraints of different income assets, the optimal weights of the currency, combined with the financial realities of theory, empirical results verify the model is reasonable and practical. On this basis, the use of ARIMA models, try to make a prediction optimal foreign exchange reserves structure, and combined to solve on how China's foreign exchange reserves and reasonable to recommend a structure optimization.