The Analysis Of The Scale, Structure And Adjustment Of Chinese Foreign Exchange Reseve

It has important practical significance to the open economies that foreign exchange reserve means. It is not only the powerful safeguard of one country’s comprehensive economic strength, it also plays a pivotal role for the healthy development of the economy. China has become the world’s largest foreign exchange reserves in the world. And, in recent years the number of increasing foreign exchange reserves is at an astonishing rate. China’s foreign exchange reserves have positive effect of payments, adjusting the national economic stability and development, intervening in the currency market, stabling the exchange rate of RMB, enhancing the ability against the risk of economy, and be helpful to national economic security, etc. But the disadvantages still exist in increasing RMB appreciation pressure, going against the smooth development of foreign trade, restricting the use of monetary policy and effect, the high cost of foreign exchange reserves reducing the efficiency in the use of funds, improving the foreign exchange reserves and increasing the risk of reserve, etc. This paper uses currency finance, international economics, applied economics time series and so as the theoretical basis. From the foreign exchange reserves theory, it discusses the utility of Chinese foreign exchange reserve. And from China’s national conditions, drawing lessons from successful international example, the paper puts forward views and suggestions for the effective management of foreign exchange reserve.Based on the study of the present situation and development of China’s foreign exchange reserves, the paper evaluates the utility and the problems existing, and puts forward the strategic adjustment of thought. First, this paper introduces the purpose and meaning of the research, and research at home and abroad, content and method. Second, this paper expounds the foreign exchange reserves of utility theory knowledge. Third, it gives the evaluation of the effectiveness of Chinese foreign exchange reserve, mainly from four aspects concluding the source of foreign exchange reserves, scale, structure and use to analysis. Finally, through the models, quantitative calculates the best scale of Chinese foreign exchange reserve, and putting forward some constructive Suggestions.According to the regressions, the results showed that the adjustment speed of foreign exchange reserves is 16.87% in the long term, while when fluctuations from equilibrium in the short term, it would need about 8 years for adjustment from non equilibrium state back to equilibrium. The results showed that Chinese foreign exchange reserves adjustment rate was very low, the structure now is not reasonable, and it was hard to improve this situation quickly in the short term.Then we give some suggestions about ajustment of Chinese foreign reserves.