The impact of the decline in foreign exchange reserves on China's economy is just a return to normal, which should be positive and good news. Since the reform and opening up, the scale of foreign exchange reserves has been rising, which has already exceeded the scale required by China's economy, and eventually led to various drawbacks of domestic RMB overspending.

The influence of excess foreign exchange reserves on China;

Front:

1, which can resist financial risks and prevent international hot money speculation.

2. It can meet the needs of import and people's use of foreign exchange (such as studying abroad). )

Negative:

1, increasing the pressure of RMB appreciation, and the excessive foreign exchange accounts for it, forcing the central bank to issue equivalent local currency.

2, foreign exchange depreciation, holding a large number of dollars, in the expectation of dollar depreciation, our foreign exchange reserves are actually decreasing, so we set up a special investment company to manage foreign exchange. Traditionally, the yield of US Treasury bonds held by our country is low, and now we are also buying strategic resources such as oil as reserves. For example, Japan has a lot of foreign exchange and they never cut down their own trees. They import a lot of foreign timber and submarine oil reserves. It is reported that Japanese oil reserves can meet the demand for at least two months, while China may not last for a week.

3. The expectation of RMB appreciation caused by excessive foreign exchange reserves makes a large number of international funds enter China's capital market through various channels, which leads to overheating of domestic real estate investment and brings certain unstable factors to the economy.