1. Rapid growth stage of foreign exchange reserves (1994-1997)

From 65438 to 0994, China's foreign exchange management system has undergone major reforms, and measures such as merging exchange rates, canceling foreign exchange retention, bank settlement and sale of foreign exchange, and establishing inter-bank foreign exchange trading market have been implemented, and the national foreign exchange reserves have achieved rapid growth. During the period of 1994-1997, the annual growth of foreign exchange reserves was 380.2 1 USD, 219.77 million USD, 314.43 million USD and 34.850 billion USD respectively. By the end of 1997, the balance of China's foreign exchange reserves increased from165438+2165438+99 million US dollars in 1993 to1398.9 million US dollars, an increase of 5.6 times, and the country's foreign exchange reserves entered a relatively loose period.

2. Slow growth stage of foreign exchange reserves (1998 -2000)

From 65438 to 0997, in the Year of the Ox, the Asian financial crisis broke out. Under its influence, the growth rate of China's foreign exchange reserves slowed down obviously, from 65,438 to 0,998. From 1998 to 2000, the annual growth of China's foreign exchange reserves was only $5.097 billion, $97.1500 million and $ 65.438+00899 billion, which were only equivalent to 14.62%, 27.87% and 65.438+00 respectively. Nevertheless, by the end of 2000, foreign exchange reserves were still considerable, increasing to $654.38+065.574 billion, ranking first in the world.

3. Substantial growth stage of foreign exchange reserves (200 1 till now)

Since 200 1, China's foreign exchange reserves have entered a stage of substantial growth, and the growth rate is very alarming. From 20001to 2004, the annual growth of China's foreign exchange reserves was $4659 1 billion, $74.242 billion, $65.438+06.844 billion and $2066.8 1 billion respectively, which was equivalent to 427.4% of the increase of China's foreign exchange reserves in 2000. (See table below)

Statement of changes in China's foreign exchange reserves from 65438 to 0994 -2004

Second, the advantages and disadvantages of high foreign exchange reserves analysis

China's advantages in maintaining high foreign exchange reserves mainly include:

1. Adjust the balance of payments and promote the stable development of the national economy.

First, when changes in the international market lead to a sharp decline in exports, or seasonal factors and emergencies lead to a temporary balance of payments deficit, the state can use sufficient foreign exchange reserves to make up for the deficit, without taking restrictive measures such as reducing imports that affect the normal operation of the domestic economy. Second, when there is a structural imbalance in the balance of payments and urgent or long-term adjustment is needed, the state can use abundant foreign exchange reserves to make adjustment, so as to reduce the external impact of adjustment, thereby reducing the negative impact of various measures on the domestic balance of supply and demand, maintaining the normal operation and stable development of the domestic economy, and alleviating the adverse impact of emergency measures on the economy.

2. Maintain international reputation and enhance the ability to attract foreign investment and external financing.

Abundant foreign exchange reserves have enhanced China's comprehensive national strength and made China's foreign reputation unprecedented, which will be conducive to attracting foreign investment, making full use of foreign government loans, credit from international financial institutions or financing in the international capital market.

3. Intervene in the foreign exchange market and stabilize the RMB exchange rate.

Adequate foreign exchange reserves will greatly enhance the ability to intervene in the foreign exchange market and play a positive role in stabilizing the RMB exchange rate and even the entire macro-financial environment and economic order.

4. Strengthening the ability to resist economic risks contributes to national economic security.

At present, China has strong foreign exchange reserves and has become a foreign exchange power in the world. There is enough foreign exchange to meet the needs of foreign economic and trade, but also to cope with international economic and financial risks and domestic unforeseen needs, which greatly improves the country's ability to resist various economic risks and contributes to national economic security.

5. It is conducive to promoting the opening of capital projects and the free convertibility of RMB.

China has abundant foreign exchange reserves and strong strength. The ecological power defects and improvement ideas of high-tech industries in the western region have laid a good foundation for promoting the opening of capital projects and realizing the free convertibility of RMB.

The disadvantages of maintaining high foreign exchange reserves in China are as follows:

1. The pressure of RMB appreciation is increasing, which is not conducive to the smooth development of foreign trade.

The sharp increase in foreign exchange reserves shows that the supply of foreign currency in the domestic foreign exchange market is greater than the demand for foreign currency, which will inevitably lead to the expectation of foreign currency depreciation and RMB appreciation. The expectation of RMB appreciation has increased the inflow of foreign capital and enlarged the balance of payments surplus; This further increased the pressure of RMB appreciation. Similarly, a substantial increase in China's foreign exchange reserves means an increase in China's foreign trade surplus, and deficit countries will use WTO rules to restrict the export of our products and protect their own industries. At present, in the world, China is the country that suffers the most anti-dumping.

2. The introduction of base currency and the increase of foreign exchange account restrict the application and effect of monetary policy.

Foreign exchange reserves are purchased and held by the state, and their corresponding reflection in the accounts of the State Administration of Foreign Exchange is foreign exchange holdings. The increase of foreign exchange accounts directly increases the supply of base money, and then causes a substantial increase in money supply through the money multiplier effect. From 2003 to September 2004, China's foreign exchange reserves increased by 348.964 billion US dollars, and more than 2,888.3 billion yuan was put into the base currency at current prices. This not only aggravates the pressure of rising prices, but also weakens the ability and effect of the monetary management department to control the money supply.

3. High foreign exchange reserves reduce the efficiency of capital utilization.

China's foreign exchange reserve structure is quite different from that of Japan and other countries. The latter is dominated by its own reserves, while the proportion of borrowed reserves in China is relatively large. In fact, too high a borrower's reserve is likely to cause a waste of funds. Because foreign exchange reserve is a symbol of real resources, there is an opportunity cost to hold it. The opportunity cost of holding foreign exchange reserves is equal to the domestic capital productivity minus the rate of return on holding foreign exchange reserves. If China holds huge foreign exchange reserves and borrows a lot of foreign debts, it is equivalent to transferring domestic funds abroad for foreigners to use at a low price, and at the same time borrowing funds from abroad at a high price, its potential losses are obvious. In addition, holding foreign exchange reserves means temporarily giving up the use of a certain amount of actual resources, thus losing the economic growth and income level brought about by these resources. Therefore, when the borrower's reserve ratio is too high, it is uneconomical to hold too much foreign exchange reserves, which will also affect the domestic economic growth.

4. Increase the cost and risk of foreign exchange reserves.

China's foreign exchange reserves have increased substantially, and its costs have also increased accordingly. At the same time, China's excessive foreign exchange reserves will inevitably increase the risk of reserves. In today's economic globalization, due to the rapid and large-scale flow of international capital, the interest rate and exchange rate in the financial market fluctuate sharply, so the exchange rate risk increases. At present, the US dollar accounts for a large proportion of China's foreign exchange reserves. Whenever the dollar depreciates and inflation occurs in the United States, China's foreign exchange reserves will depreciate accordingly, resulting in the loss of foreign exchange reserves. Since 200 1, the Federal Reserve has cut interest rates 12 times, and the dollar has depreciated against the euro 12%. If 60% of China's foreign exchange reserves are calculated as US dollar reserves, from June 2002 to August 2004, the depreciation of China's US dollar foreign exchange reserves against the euro has caused losses of more than US$ 53 billion.

5. Loss of preferential loans from the International Monetary Fund.

According to the relevant regulations of the IMF, when a member country has a foreign exchange balance deficit, it can withdraw a low-interest loan equivalent to its share from the "trust fund". If member countries need to adjust due to structural problems in production and trade, they can also get medium-and long-term loans equivalent to their share 160%, and the interest rate is more favorable; On the contrary, countries with sufficient foreign exchange reserves not only can't enjoy these preferential low-interest loans, but also must provide help to countries with balance of payments difficulties when necessary.