China's Scale Of Foreign Reserves And Its Impact On Economy

With the China accession to the world trade organization, china is more open-minded,more determined to open up and reform measures, the successful implementation ofsurpassing Japan in2010, as the world's second largest economy, and is expected to surpassAmerica become the largest economy in the world in2020China's international status is increasing significantly, international influence is alsogreatly enhanced, this also let many people inspired by, the living standards of the peoplecontinued to improve, use all kinds of new systems and mechanism to make the change ofChina are very important, but a problem can not be ignored, the Chinese is opening to theoutside world, a big problem for surplus is brought under the huge foreign exchangereserves, so that China has become the world's largest foreign exchange reserves, in orderto realize the unification of exchange rates and a managed floating exchange rate systemmarked by a series of initiatives to implement, the successful implementation of the reformof the foreign exchange management system by china in1994, and implementation of theconvertibility of the RMB current account in1996, and the gradual capital accountconvertibility is in good order and well arranged and the introduction of the pilotDuring the thirty years of reform and opening up, foreign exchange reserves has beenin a steady growth, by2013, the scale has reached3800000000000US dollars, ranking firstin the world, of course, is the key essential role to tackle successfully USA financial crisisand Asian financial crisis in China in1997and2008, huge foreign exchange reservessweeping through the world, is an important tool for us to overcome the difficulties,overcome the crisis,but with the expansion of foreign exchange reserves deformity, thecontinued appreciation of the RMB, with the intangible wealth evaporation of the yuan,the global flow of international hot money, how to make scientific and reasonable scale offoreign exchange reserve, has affected the efficiency of using the foreign exchange reserve,foreign exchange management efficiency system, and even can be said that this is related toChina's economic security, national security,so to develop a scientific and reasonableforeign exchange reserve scale is urgentThis paper firstly introduces the history and current situation of China's foreignexchange reserves, through a variety of methods to compare with our country's foreignexchange reserves in the history of the same level and the current level, then introduceshow the theoretical study of the method to determine the optimal foreign exchange reserves,the main cost benefit analysis, ratio analysis, reserve demand function method, and if theexcessive foreign exchange reserves, there will be inevitable marginal cost of excessiveforeign exchange reserves ", so that the foreign exchange reserves will increase the cost, the third chapter analyzes the scale of China's foreign exchange reserves is so big, what was thereason for this, is the source of our country foreign exchange reserves, current-accountbalance sources from the source,the difference of capital projects, as well as the hot moneyto illustrate the sources of China's foreign exchange reserves, the third chapter analyzes ourcountry foreign exchange reserve causes, namely the long-term China's rapid economicdevelopment is an important reason for China's rapid growth of foreign exchange reserves.There is, the reform of RMB exchange rate system is also an important reason, finallyanalyzes the short-term hot money and so on This influx caused the rise of China's foreignexchange reserves. The fourth chapter focuses on the analysis of the positive effects ofChina's foreign exchange reserves on China's economy: to promote the free convertibilityof the renminbi, which is beneficial to the RMB to become a world currency is conduciveto enhancing the ability of our government regulation and intervention in foreign exchangemarket, and foreign exchange market stability is conducive to maintaining our internationalreputation guarantee, to enhance the financing ability and external payments capacity,enabling increased macro adjustment ability of our country, enhance the ability to respondto a major crisis of the potential to describe several aspects of the. The fifth chapteranalyzes the negative influence of the huge foreign exchange reserves, the economy of ourcountry: first, the impact of monetary supply of china. Second,foreign exchange reserveswill produce very great pressure on China's inflation. Third, the rapid growth of foreignexchange reserves is not conducive to adjust and optimize the upgrading and structuralbalance our industrial economic structure. Fourth, huge foreign exchange reserves, increasethe cost of reserve of our country and the difficulty of management cost. After the analysisof the problems in this paper after all, will have a higher degree and high up on the basis ofall the problems, to explore and analyze the strategies and measures to optimize themanagement of our country's moderate scale of foreign exchange reserves, trying tofundamentally to China's foreign exchange reserves is above the optimum scale, mainlythrough strict control of foreign debt, improvement of foreign investment, optimize therational foreign exchange reserves, then can draw lessons from the foreign excellent andsuccessful practices, such as the introduction of the QDII mechanism, RMB appreciationtrend, can accelerate the process of internationalization of RMB,making the RMB as aninternational currency bilateral clearing gradually, make the RMB has become anotherforeign exchange reserves, so that China's economic development and foreign trade morevigor and vitality, more again stress and pressure, strengthen the management of foreignexchanges, to create the optimal foreign exchange reserve economic benefits, improve theforeign exchange reserves economic benefits, the international reserve currencydiversification and different try as far as possible, so as to more effectively spread the risk and reduce dependence on a certain country, foreign exchange management in enhancingtransparency and prevention The inflow of hot money, and the establishment of a currencyswap under the premise, to build the foreign exchange risk management system, so thatChina's foreign exchange management more scientific, optimization, mechanism...