This problem involves many aspects, and the simple explanation is as follows: the state only allows RMB to circulate in China, and foreign exchange can only be used when it reaches China. For example, when foreign businessmen come to China, they must go to the bank to change their dollars into RMB. After receiving the US dollars, the country will exchange the corresponding RMB for the merchants, so that the country can collect the US dollars and release the RMB. China has maintained a trade surplus in recent years, resulting in a large amount of foreign exchange reserves. At the same time, a large amount of RMB has been invested in various fields in China, resulting in the current excess liquidity and inflation in China!

The explanation may not be completely standardized, but the meaning has been clearly expressed.