China's foreign exchange reserves and related statistics.
age
foreign exchange reserves
total volume of trade
trade surplus
Utilization of foreign capital 1978
2
206
- 1 1
1980
- 13
38 1
- 19
1985
26
696
- 149
45
1986
2 1
739
- 120
73
1987
29
827
-38
Eighty-five
1988
34
1028
-78
102
1989
Fifty-six
1 1 17
-66
10 1
1990
1 1 1
1 154
87
103
199 1
2 17
1357
8 1
1 16
1992
194
1655
Forty-four
192
1993
2 12
1957
- 122
390
1994
5 16
2366
54
432
1995
736
2809
167
48 1
1996
1050
2899
122
548
1997
1399
3252
404
644
1998
1450
3240
435
586
1999
1547
3606
292
527
2000
1656
4743
24 1
594
200 1
2 122
5097
226
497
2002
2864
6208
304
550
2003
4033
85 10
255
56 1
2004
6099
1 1548
320
606
2005
8 189
1422 1
10 19
603
Note: The data in the table are from the websites of National Bureau of Statistics, State Administration of Foreign Exchange and People's Bank of China.
First, the growth process of China's foreign exchange reserves
Foreign exchange reserves are the basis of a country's external revenue and expenditure. There are two main sources: first, the trade surplus; The second is the net inflow of capital. Therefore, the amount of foreign exchange reserves not only reflects the vitality and attractiveness of a country's foreign economic transactions, but also reflects the strength of the country's credit ability to borrow and repay debts. That is to say, in a sense, the more foreign exchange reserves a country has, on the one hand, it marks the stronger its export competitiveness; On the other hand, it shows that the country's political and economic situation is stable and foreign capital is scrambling to enter. or vice versa, Dallas to the auditorium
Since the reform and opening up, with the continuous expansion of the breadth and depth of China's foreign economic exchanges, the scale of foreign exchange reserves has also undergone tremendous changes. Throughout the 25 years of reform and opening up, the growth of China's foreign exchange reserves can be roughly divided into three stages:
The first stage: the period of "zero reserve"
The whole 1980s, as the first decade of China's "reform" and "opening up", was still within the constraints of the socialist planned economic system. Of course, at this stage, China is still in the "experimental" stage of opening up. At that time, China people didn't know much about the world, and the world didn't know much about China. Therefore, relying on the weak foundation and careful experiments, we still cling to the law of "balance of payments with a slight surplus" under the planned economy, and we still cannot cross the "thunder pool".
During the period of 1978- 1989, only 1982 and 1983 had a small trade surplus, while others 10 were all trade deficits. However, the scale of surplus and deficit is not large. Only 1985 and 1988 have trade deficits exceeding 1000 billion USD. At the same time, the total annual import and export volume of foreign trade during this period was only tens of billions of dollars.
Similarly, at this stage, China's efforts to open up to the outside world and introduce foreign capital are not strong and the scale is small. In 1980s, except for 1988 and 1989, the total amount of actually utilized foreign capital in China was only several billion dollars. During the period of 1978- 1989, the total amount of actually utilized foreign capital in China was only $58 billion, less than the quota of 1997.
It is precisely because of the small scale of foreign trade import and export and the small amount of foreign capital actually utilized that China's foreign exchange reserves were basically in a state of "zero reserves" in the 1980s. During the period of 1978- 1989, except for $5.6 billion in 1989, the foreign exchange reserves in other years did not exceed $5 billion.
In fact, when a country's opening to the outside world is limited and its economic dependence on foreign countries is not high, the growth of its foreign exchange reserves and the demand for foreign exchange reserves are not great. On the whole, however, China was not only poor in economy and short of funds, especially foreign exchange funds, but also extremely short of domestic materials and huge in inflationary pressure. Therefore, at that time, its foreign trade export capacity was weak, and foreign capital inflows were relatively small. This stage is also the most difficult period of China's reform and opening up.
The second stage:10 billion reserve period
After careful exploration and experience summary in 1980s, China in 1990s began to walk out of the shadow of "planned economy" and gradually moved towards a new era of "market economy". It should be said that 1990- 1995 is a transitional period or transition period of China's economic reform and opening up, and it is also a turning point. At this stage, the world has a better understanding of China and China has a better understanding of the world. At this stage, although there was a very serious inflation of 1993- 1995, the new macro-control mechanism was effective and useful, but it was still near misses, and China's economic reform successfully passed this difficulty.
During the period of 1990- 1995, the total foreign trade of China increased from 1000 billion US dollars to nearly 300 billion US dollars. Judging from the difference between the import and export of commodities, after changing the trade deficit in the past ten years, there has been a trade surplus in five of the six years. Except for the surplus of 1995 of 167 billion dollars, although the surplus in other years is less than 100 billion dollars, it is a major signal of quantitative change to qualitative change.
During this period, China began to increase the intensity of introducing foreign capital, especially to further broaden the channels and space of international financing, and the attraction of China's opening to the outside world became more and more attractive. The total amount of foreign capital actually utilized in the whole year increased from10 billion to nearly 50 billion, and more than 90% of the foreign capital introduced was "direct investment". This ensures the reliability and security of introducing foreign capital to a certain extent.
It is precisely because of the obvious improvement in the situation of foreign trade import and export and the utilization of foreign capital that the balance of China's foreign exchange reserves rose rapidly from $654.38+00 billion to more than $70 billion during this period. The rapid and steady growth of foreign exchange reserves indicates that China's foreign exchange reserves are coming out of the "shortage" era, and the sustained growth of foreign exchange reserves has become our confidence and pride.
The third stage: the period of 100 billion reserves
At the end of 1996, China's economic operation successfully achieved a "soft landing" and smoothly entered the channel of "low prices and high growth". 1997 in the first half of the year, all the "main commodities" sampled by the state were in a state of oversupply or balance between supply and demand. Judging from this, the "shortage economy" that has plagued New China for nearly half a century has finally come to an end, and a new era of buyer's market has arrived. This marks that the level of economic development in China has leapt to a new level, and the people's living standards have also reached a new stage.
From 65438 to 0997, China experienced a once-in-a-century flood and Southeast Asian financial crisis. The total import and export volume of foreign trade exceeded $300 billion for the first time, and the trade surplus rose by leaps and bounds, exceeding $40 billion for the first time. This once again shows that China's economy has entered a new virtuous cycle period, and it has a strong ability to resist external risks and anti-interference. From 65438 to 0998, China continued to maintain a second trade surplus of more than 40 billion US dollars under the condition that the total trade scale remained unchanged. In the following six years, although China's trade surplus remained between $20 billion and $30 billion every year, the total scale of China's trade continued to expand: it exceeded $400 billion in 2000; 200 1 year exceeds 500 billion USD; In 2002, it exceeded 600 billion US dollars; It exceeded $800 billion in 2003; In 2004, it broke through the $654.38 billion mark. However, in 2005, not only was the total trade volume close to $654.38 +0.4 trillion, but the trade surplus miraculously crossed the "absolute" mark of $654.38 +0.4 trillion for the first time. This is another qualitative leap.
At the same time, the total amount of foreign capital actually utilized in China 1997 reached a record high, reaching $64.4 billion. In the following eight years, the actual utilization of foreign capital in China has been maintained at 50-60 billion US dollars every year, which is a set of data that amazes the world. The stable scale of $50-60 billion shows that China has a stable political situation and an excellent investment environment. On the other hand, it shows that the introduction of foreign capital in China is no longer "hungry for food", and of course, it is no longer "the more the better".
1At the end of 1996, China officially accepted the eighth clause of the International Monetary Fund, and realized the convertibility of RMB under the current account. This shows that enterprises and residents have more opportunities to hold foreign exchange deposits. This year, the balance of China's foreign exchange reserves exceeded 1 10,000 USD for the first time, and further increased to10.4 trillion USD in 1997. 200 1 year broke through 200 billion dollars again; In 2003, it exceeded $400 billion; In 2004, it exceeded 600 billion US dollars; In 2005, it exceeded $800 billion. If it develops at this rate, by the end of 2006, China's foreign exchange reserves will definitely exceed the trillion-dollar mark, and it will far surpass Japan and become the first in the world. Is it good or bad for such a huge scale and such a high-speed growth?
Second, the analysis of the appropriate scale of China's foreign exchange reserves.
In the environment of economic internationalization, foreign exchange reserves are very important for any country. Generally speaking, foreign exchange reserves mainly have the following four functions or functions:
First, foreign exchange reserves can offset the trade deficit and maintain a country's necessary and normal import capacity.
Second, maintaining a certain amount of foreign exchange reserves is a credit guarantee and material guarantee for a country to borrow and repay its debts.
Third, foreign exchange reserves are a powerful weapon for a government to intervene in its foreign exchange market and adjust the exchange rate of its local currency.
Fourth, foreign exchange reserves will be the last strategic reserve of a country in the event of economic turmoil or war disaster.
Therefore, the larger the scale of a country's foreign exchange reserves, the better, or what its appropriate scale should be. The answer to this question is obviously not simply looking at a data.
In fact, the evaluation of the appropriate scale of foreign exchange reserves is a complex issue. Different countries may have different standards. For example, as an issuer of international reserve currency, they don't need much foreign exchange reserves, because their currency has the function of purchasing power internationally, so they hold relatively few foreign exchange reserves. For example, the United States and the European Union hold only tens of billions of dollars in foreign exchange reserves. But there are exceptions For example, the Japanese yen is one of the three most important international reserve currencies. However, Japan currently has the largest foreign exchange reserves in the world. Why? I think the incomplete reasons at least include: Japan is not only small in territory and lacking in resources, but also has a strong sense of national crisis and is not confident. Of course, there may be other motives.
In addition, there are great differences between developed and underdeveloped countries, open and non-open countries, and large and small countries in determining the appropriate scale of foreign exchange reserves.
From 65438 to 0960, American professor triffin proposed that the ratio of a country's international reserves to its annual imports should be 40%. 20% is the bottom line, and less than 30% will be supplemented. This view was later accepted by many western countries, who advocated that a country's foreign exchange reserves should generally meet the import payment for 3-4 months. After the Southeast Asian financial crisis, some people think that a country's foreign exchange reserves should not be less than the short-term foreign debt scale to prevent the financial crisis. However, some international financial organizations emphasize that the scale of a country's foreign exchange reserves should be able to maintain financial stability, which obviously emphasizes the importance of "adequate" foreign exchange reserves. However, due to the differences of actual national conditions in different countries, there is no unified evaluation standard in the world.
Of course, in terms of quantity, any country's foreign exchange reserves should have a moderate scale, because foreign exchange reserves have costs. This cost mainly comes from two aspects: first, foreign exchange reserve assets must have enough "liquidity" to ensure their normal function. However, sufficient liquidity is often at the expense of reducing profitability requirements. Second, because the exchange rate is always changing, foreign exchange reserve assets are easily affected by exchange rate risks, resulting in intangible book losses. Therefore, the more foreign exchange reserves, the better. It should be safe enough but not wasted.
As a populous country in the process of reform and opening up, what should be the appropriate scale of China's foreign exchange reserves? I think this is a major strategic issue, and it is not convenient to speculate, but at least it can be considered and analyzed from the following aspects.
China is an economic power of reform and opening up, and needs more foreign exchange reserves to protect it.
China is an economic power with a population of1300 million, but we are not yet an economic power. 1982, China's GDP exceeded 500 billion yuan for the first time; 1986 GDP breakthrough 1 trillion yuan; 1995 GDP exceeded 5 trillion yuan; In 2002, the GDP exceeded 10 trillion yuan; In 2004, China's GDP approached 16 trillion yuan. This is a sign that China's economy is full of vitality. However, from the perspective of per capita GDP, according to the statistics of the 2004 census, China's GDP ranks sixth in the world, but the per capita GDP ranks 107 in the world, ranking at the bottom.
Undoubtedly, with the successful promotion and deepening of reform and opening up, China's economy will have a huge space for rapid development. But this process can't be smooth sailing, and we may encounter many difficulties and problems that we can't predict. Therefore, the construction in a rapidly developing country must be supported by sufficient foreign exchange reserves. At this point, we should not be too stingy.
The non-convertible mechanism of RMB under capital account has virtually "exaggerated" the scale of foreign exchange reserves.
Although RMB is freely convertible under current account, capital account is still strictly controlled in China, which means that China citizens are not free to "trade" local currency financial assets into foreign currency financial assets. From the perspective of investment, China residents can only invest in local currency financial assets in the domestic market, but are not free to invest in foreign financial assets. Therefore, the people in our country hold relatively few foreign exchange assets. Except for foreign-related enterprises, a large amount of foreign exchange assets can only be concentrated in the hands of the central government and then become foreign exchange reserve assets. Therefore, the "reverse" mechanism under strict capital control virtually exaggerates the total size of China's foreign exchange reserves.
According to the statistics of the People's Bank of China, at the end of the fourth quarter of 2005, the balance of foreign exchange deposits of financial institutions was only US$ 65,438+US$ 0.665438+US$ 57 million, of which foreign exchange deposits of enterprises and foreign exchange savings deposits of residents accounted for roughly half. Even with foreign exchange reserves, China's foreign exchange assets are not enough 1 trillion dollars, while the balance of RMB deposits in China is as high as 28.72 trillion yuan, of which the local currency savings deposits of urban and rural residents in China have reached 14. 1 1 trillion yuan. It can be seen that the degree of foreignization of China residents' financial assets is quite low. Even counting foreign exchange reserves, the alienation of China's entire financial assets is still not high.
The annual net inflow of foreign capital of $50 billion to $60 billion has once again "exaggerated" the rapid growth of foreign exchange reserves.
The original source of foreign exchange reserves is nothing more than two aspects: one is from the current account; The second is from financial projects. Generally speaking, the growth of foreign exchange reserves brought by trade surplus is considerable and real, and often has good stability, so it is the most solid economic foundation of foreign exchange reserves; However, the growth of foreign exchange reserves caused by foreign capital inflows has strong liquidity and instability. Therefore, there should be a considerable amount of foreign exchange reserves to cope with the massive inflow of foreign capital.
During the period of 1996-2004, although the driving force for the growth of China's foreign exchange reserves came from the "double surplus", that is, the trade surplus and the financial surplus, the total annual net inflow of foreign capital remained at 50-60 billion US dollars, while the trade surplus was smaller than it, generally only 20-40 billion US dollars per year. In other words, a considerable part of the growth of China's foreign exchange reserves mainly comes from the net inflow of foreign capital. Therefore, such "inflated" foreign exchange reserves cannot support the conclusion that foreign exchange reserves are "surplus".
The world is still not peaceful and the motherland has not been reunified, which also needs huge foreign exchange reserves as the backing.
As a strategic material, foreign exchange reserves must meet the full needs of national security and sovereignty integrity. From the perspective of the world structure, peace and development are the general trend, but today's world is not peaceful, Sino-US relations are advancing in twists and turns, Sino-Japanese relations are stagnant in bumps, Japanese elements are still making troubles, and national extremism and terrorist forces are still rampant. All this requires us to be vigilant and make necessary strategic preparations, including the foreign exchange reserve strategy.
In short, the author believes that the main risk of China's foreign exchange reserves at present is structural risk, not total risk.
Three, China foreign exchange reserve structure and risk analysis.
The structure of foreign exchange reserves is also the distribution structure of foreign exchange reserve assets. Among them, the most important foreign exchange reserve structure has two aspects: first, the monetary structure; The second is the term structure. This is also the biggest risk of the asset structure of foreign exchange reserves.
From the perspective of currency structure, if foreign exchange reserve assets are too concentrated in a "weak currency", it will inevitably lead to excessive exchange rate risk, but discounting the "weak currency" may bring some interest income. Of course, whether the actual income is positive or negative needs specific analysis.
From the perspective of term structure, the liquidity requirements of foreign exchange reserve assets are mainly considered. Because foreign exchange reserves are used for daily needs and unexpected purposes, the term structure of foreign exchange reserve assets distribution should first meet the liquidity demand, and then meet the profitability demand on the basis of giving consideration to safety.
The storage location and storage structure of foreign exchange reserves have always been the top secret kept by all countries. But from the general description of official information, we can easily find some clues. Accordingly, we can make a risk analysis of the following conclusions:
One of the risks: under the premise that RMB is not freely convertible in financial projects, we are forced to concentrate most of our foreign exchange assets in the hands of the central government-turning them into foreign exchange reserves.
It is conceivable that in a country where the local currency is fully convertible, residents can freely use foreign exchange for import and export, foreign direct investment or securities investment, and local currency and foreign currency can be freely exchanged or traded, so that their citizens can freely hold their own or foreign financial assets. If so, citizens' financial assets will be diversified into foreign currency financial assets, and will not be too concentrated in the hands of the central government and become foreign exchange reserves.
On the contrary, because RMB can only be freely convertible under the current account, but not under the financial account, citizens can only obtain foreign exchange and hold foreign exchange deposits through trade in goods and services and regular income and expenditure transfer. In addition, citizens cannot convert local currency financial assets into foreign currency financial assets through "investment" financial transactions. As a result, most citizens' financial assets can only be local currency assets, not foreign exchange assets. This is one of the real reasons why China's foreign exchange reserves are nominally "too large".
Therefore, it is necessary for us to realize the convertibility of RMB under financial projects as soon as possible, so as to divert or release the pressure or risk of "excessive" foreign exchange reserves, and let residents have more freedom to choose and dispose of their assets in all local and foreign currency financial assets reasonably and dispersedly. This is the truth of "storing foreign exchange in the people". At the same time, it is also conducive to promoting the marketization of RMB exchange rate, thus effectively releasing the pressure of RMB appreciation and reducing the cost and risk of government intervention in the foreign exchange market.
The second risk: the huge foreign exchange reserves are excessively concentrated in dollar assets, which may be forced or forced, but it is absolutely harmful to avoid exchange rate risks.
The United States is China's largest trading partner. Since the mid-1990s, US dollar assets have accounted for more than 60% of China's foreign exchange reserves. However, in recent years, with the continuous enlargement of China's total import and export volume, China's "trade dollar" and "trade surplus dollar" have been increasing; At the same time, since the mid-1990s, in order to curb the pressure of RMB's continuous appreciation against the US dollar, under the exchange rate control mechanism with the US dollar as the intervention currency, China officials have continuously inhaled US dollars-increasing its US dollar reserves. As a result, the proportion of dollar assets in China's foreign exchange reserves will definitely increase. Therefore, it is estimated that the current dollar assets in foreign exchange reserves may exceed 80%.
Whatever the reason, it is obviously dangerous to put eggs in one basket. Judging from the long-term trend, the US dollar does belong to the category of "weak currency". Judging from the exchange rate of the US dollar against the Japanese yen, the US dollar has depreciated for a long time. In the early 1980s, the exchange rate between the US dollar and the Japanese yen was around 240, but by the mid-1990s, the exchange rate had dropped to around 80. Judging from the exchange rate of the US dollar against the RMB, the US dollar is also depreciating. In the mid-1990s, the exchange rate of the US dollar against RMB was around 8.7, but now it has dropped to around 8.0, so there should be room for the US dollar to fall.
China's foreign exchange reserve currency is single, and it is excessively concentrated in the "weak currency"-the US dollar. Assuming that the long-term depreciation of the US dollar will inevitably lead to a huge book loss of China's foreign exchange reserves, the result will inevitably put China's monetary policy in a "dilemma": on the one hand, if a large number of US dollars are sold to improve the currency structure of foreign exchange reserves, it will inevitably have a demonstration effect on neighboring countries, and lead to panic in the international exchange market and a sharp decline in the exchange rate of the US dollar. On the other hand, if the currency structure of the existing foreign exchange reserves is not changed and the dollar is not sold, the pressure of RMB appreciation will increase, thus stimulating the faster growth of foreign exchange reserves. In order to reduce the impact of foreign exchange reserves on the domestic money market, the central bank must reduce the money supply by withdrawing cash or raising interest rates, but this will only boost the appreciation of the local currency; On the other hand, in order to reduce the pressure of appreciation, if the central bank increases the money supply or lowers interest rates, it will make the money market, which is already extremely loose because of foreign exchange reserves, worse.
From this point of view, it is imperative to reduce the holdings of US dollars and US dollar assets. After the dollar is reduced, it is necessary to avoid repeating the same mistakes. While increasing our holdings of monetary assets such as the euro, we can even increase our holdings of gold reserves or strategic oil reserves. The structural adjustment of foreign exchange reserves will be a gradual process. Although this process cannot be urgent, action must be taken.
The third risk: the storage location and investment term structure of China's foreign exchange reserve assets are too concentrated, which may lead to political risks and credit risks.
The currency structure of China's foreign exchange reserves is highly concentrated not only in the US dollar, but also in the US dollar assets. Judging from the types and duration of investment, a considerable part of China's large foreign exchange reserves are deposited in American commercial banks, and a large part of them have purchased various American bonds, including US Treasury bonds, US Treasury bonds, federal government agency bonds and US corporate bonds. In addition, it should also include a small amount of overseas dollar assets.
The United States has always regarded China as its biggest potential competitor. Due to ideological differences and the sensitive Taiwan Strait issue, the United States has always kept a distance from China, taking the issue of Taiwan Province Province as a bargaining chip in negotiations with China and making things difficult for China from time to time. At this point, we should be especially vigilant and try our best to avoid political risks in the places where foreign exchange reserves are stored.
Of course, in the investment term structure, we should also spread the risks as much as possible. Generally speaking, the distribution structure of foreign exchange reserve assets in different periods should be different. For example, in the turbulent international environment, foreign exchange reserves should be placed in bank deposits and short-term securities with high degree of realization; In times of peace and stability, foreign exchange reserves can be placed more on medium and long-term varieties.
Public trust. The National Bureau of Statistics released the 16th series of reports on China's economic and social development achievements in the past 30 years of reform and opening up. According to the report, in the past three decades, China has attracted a substantial increase in foreign direct investment, and its foreign exchange reserves rank first in the world.
The report shows that since the reform and opening up 30 years ago, the investment environment in China has been continuously improved, attracting foreign direct investment has increased year by year. Every decade, China attracts a new level of foreign direct investment. 1979, the total foreign direct investment of China was only $80,000; 1980, $57 million; 1990 rose to $3.487 billion, 60 times higher than that before 10. In 2000, it further increased to $407150,000, which was nearly 1 1 times higher than that before. In 2007, China's foreign direct investment reached US$ 83.52 billion, more than double that of 2000. In 2007, China attracted a total of 775.42 billion US dollars of foreign direct investment, making it the largest developing country in China. In 2007, China ranked sixth in the world in utilizing foreign direct investment, accounting for 16.7% of the total of developing countries.
According to the report, in the past 30 years, with the deepening of reform and opening up and the strengthening of China's comprehensive national strength, foreign exchange reserves have increased substantially. 1978, China's foreign exchange reserves were only 1 600 million US dollars (from the UN database), which was only 3.7% of the world's1Germany at that time. 1990 increased to $28.6 billion, equivalent to 39.5% of Taiwan Province province in China, which ranked 1 in the world at that time; In 2000, China's foreign exchange reserves increased to US$ 654.38+065.6 billion, ranking second in the world, equivalent to 47.7% of Japan's ranking of 654.38+0 at that time. In 200 1 year, China's foreign exchange reserves exceeded 200 billion US dollars, reaching 2 122 billion US dollars; At the end of 2006, it broke through the trillion-dollar mark, reaching106.63 billion dollars, surpassing Japan to become the country with the largest foreign exchange reserves in the world. From 1979 to 2007, China's foreign exchange reserves increased by1526.7 billion US dollars, with an average annual increase of 52.6 billion US dollars. Especially from 2000 to 2007, * * * increased by $654.38+036.27 billion, with an average annual growth of $654.38+094.7 billion.
According to the data released by the central bank on June 5438+04, as of June, China's foreign exchange reserves have reached1808.8 billion US dollars. At present, China's foreign exchange reserves have actually exceeded the total gross domestic product (GDP) of 124 countries in the world.
According to the world GDP ranking published by the World Bank in 2007, Vietnam ranked 57th with a GDP of $710.20 billion, while Kiribati, a Pacific island country, ranked the bottom with a GDP of $87 million. If you add up the GDP of 124 countries, from Vietnam in the 57th place to Kiribati in the 80th place, the total is1759.7 billion US dollars, that is to say, China's current foreign exchange reserves have exceeded the total GDP of these 124 countries.
The functions of foreign exchange reserves mainly include the following four aspects:
First, adjust the balance of payments to ensure external payment.
The second is to intervene in the foreign exchange market and stabilize the local currency exchange rate.
The third is to maintain international reputation and improve external financing ability.
The fourth is to enhance comprehensive national strength and ability to resist risks.
A certain foreign exchange reserve is an important means for a country to adjust its economy and achieve internal and external balance. When the balance of payments is in deficit, the use of foreign exchange reserves can promote the balance of payments; When the domestic macro-economy is unbalanced and the total demand exceeds the total supply, foreign exchange can be used to organize imports, thus adjusting the relationship between total supply and total demand and promoting macroeconomic balance. At the same time, when the exchange rate fluctuates, foreign exchange reserves can be used to intervene in the exchange rate to stabilize the exchange rate. Therefore, foreign exchange reserves are an indispensable means to achieve economic balance and stability, especially when economic globalization is developing and one country's economy is more susceptible to the influence of other countries' economies.
Generally speaking, increasing foreign exchange reserves can not only enhance macro-control ability, but also help to maintain the international reputation of countries and enterprises, expand international trade, attract foreign investment, reduce the financing cost of domestic enterprises, and prevent and resolve international financial risks. The appropriate level of foreign exchange reserves depends on many factors, such as import and export, the scale of foreign debt, and the actual utilization of foreign capital. Foreign exchange reserves should be kept at a moderate level according to the comparison of income and cost and these conditions.
As a symbol of a country's economic and financial strength, foreign exchange reserves are the material basis for making up its balance of payments deficit, stabilizing its exchange rate and maintaining its international reputation. For developing countries, it is often necessary to maintain foreign exchange reserves above the conventional level. However, the more foreign exchange reserves, the better. In recent years, the rapid expansion of China's foreign exchange reserves has had many negative effects on economic development.
1, which damages the potential of economic growth. The inflow of foreign exchange reserves of a certain scale represents the outflow of physical resources of a corresponding scale, which is not conducive to a country's economic growth. If the extraordinary growth of China's foreign exchange reserves continues, it will damage the potential of China's economic growth.
2. It has brought great price difference loss. According to conservative estimates, if you have 600 billion US dollars in foreign exchange reserves, the annual loss will be as high as 654.38+000 billion US dollars if the difference between the investment profit rate and the foreign exchange reserve yield is 2%. If the risk of exchange rate changes is taken into account, this potential loss will be even greater. In addition, most of the foreign exchange reserves of many countries are dollar assets. If the dollar depreciates, the country's reserve assets will also shrink seriously.
3. The opportunity cost is greatly lost. China will introduce about 50 billion US dollars of foreign capital every year, so the state will provide many tax incentives; At the same time, China holds more than $1 trillion in foreign exchange reserves, which are idle. In this way, on the one hand, the state's fiscal revenue is reduced, on the other hand, the people are frugal and lend money to foreigners, and its potential opportunity cost cannot be ignored.
4. Weakened the effect of macro-control. Under the current foreign exchange management system, the central bank has unlimited responsibility to buy back foreign exchange funds, so with the growth of foreign exchange reserves, the amount of foreign exchange has been increasing. The rapid growth of foreign exchange not only restricts the effectiveness of macro-control since 2004, but also weakens the effect of macro-control structurally, further increasing the pressure of RMB appreciation, making the central bank's space for regulating monetary policy smaller and smaller.
5, affect the use of international preferential loans. Excessive foreign exchange reserves will make China lose the preferential loans from the International Monetary Fund. According to the regulations of the IMF, countries with sufficient foreign exchange reserves can not only enjoy preferential and low-interest loans from the IMF, but also provide assistance to other member countries with balance of payments difficulties when necessary. This is a waste for our country.
Landlord, I don't understand this either. The score is not important. I hope it helps.
I wish all the best!
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