Foreign exchange reserves are assets held by a country's monetary authorities and can be converted into foreign currencies at any time. Not all national currencies can be used as international reserve assets. Only those currencies that occupy an important position in the international monetary system and can be freely converted into other reserve assets can be used as international reserve assets.

The high foreign exchange reserves are the result of China's rapid economic growth, which shows the important position of China's economy in the world economic system. However, if this trend continues, it will also bring some negative effects.