1. Damage 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 economic growth.
2. Bring interest margin 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 is 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 shrink seriously.
3. The opportunity cost is greatly lost. China introduces about 50 billion dollars of foreign capital every year, so the state should provide many tax incentives; At the same time, China holds more than 1 trillion dollars of 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 concessional loans. Excessive foreign exchange reserves will make China lose 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 China.
6. Accelerate the inflow of hot money and trigger or accelerate domestic inflation.
7. The dynamic structure leading to economic growth is unbalanced. The high foreign exchange reserves lead to an imbalance in the dynamic structure of economic growth, which is not conducive to the transformation of economic growth into a domestic demand-oriented model.
8. Excessive liquidity caused by excessive foreign exchange reserves is an important reason for excess liquidity, which affects the efficiency of bank capital use and aggravates the imbalance of economic structure. The so-called excess liquidity problem means that the money supply is too large.
The functions of foreign exchange reserves mainly include the following four aspects:
First, adjust the balance of payments to ensure external payment.
Second, intervene in the foreign exchange market and stabilize the local currency exchange rate.
Third, maintain international reputation and improve financing capacity.
Fourth, enhance comprehensive national strength and resist financial 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.
The situation of China's foreign exchange reserves and the impact of foreign exchange reserves on the domestic economy (which is a topic I may have to discuss in the exam, so I just need to count it, not too much, and I can't finish answering it)
Ha ha ha！！！
It is reported that China's foreign exchange reserve balance has reached 242.8 billion US dollars [1] this year, while China's gross national product is about 9.6 trillion yuan, about 1. 1 trillion US dollars [2]. According to the above data, China's foreign exchange reserves account for about 2 1% of China's gross national product, which is roughly equal to the amount of national debt officially announced by China (US$ 233.4 billion, [3]).
Globally, the absolute value of Chinese mainland's foreign exchange reserves is second only to that of Japan (US$ 400 billion) and higher than that of Taiwan, Hong Kong, Macao and South Korea (the three foreign exchange reserves are between100 billion and130 billion respectively). [4]
Undoubtedly, China's huge foreign exchange reserves have played a positive role in calming the impact of international market fluctuations on China. But from another perspective, China, as a mainland economy, still implements foreign exchange control to a certain extent. Whether it is necessary to maintain such a huge foreign exchange reserve as an emergency fund to deal with bank runs is really worth discussing. Some people say that huge foreign exchange reserves will help boost the confidence of foreign investors, but I don't think this is true either: the absolute value of Japanese foreign exchange reserves and the proportion of Taiwan Province's foreign exchange reserves in GDP are higher than that of Chinese mainland. At present, there is no data showing that Japan and Taiwan Province Province are attractive to foreign investors.
In addition, according to experts' estimation, the annual yield of these foreign currencies put abroad by China should be around 5% [1]. Considering the factors of inflation and dollar depreciation, the author estimates that the actual annual rate of return will not exceed 2%.
As a developing country, China urgently needs funds for domestic development. If most of the foreign exchange reserves, which account for about 2 1% of China's gross national product, are converted into RMB and invested in popularizing education, medical care and social security systems, environmental protection, as well as the standardization, institutionalization and informatization of domestic economy, finance and commerce (such as establishing a national credit information system), and given corresponding policy support, it will have a long-term and stable effect on China's future development. To say the least, if this money can be used to repay the national debt issued by China over the years, then this huge private fund will greatly promote the economic development of China.
As far as we know, most of China's foreign exchange reserves are US dollar assets, especially a large number of US debts [1]. The synchronous growth of China's national debt and foreign exchange reserves is equivalent to a very strange process of capital flowing from China to the United States: (a) *** raising funds from the people in the form of national debt; (b) Converting RMB funds into foreign exchange reserves (especially US dollars) through trade or financial exchange; (c) Using foreign exchange reserves to purchase US bonds (especially US Treasury bonds). The actual effect is that China people borrow money from Americans while scrimping and saving. As mentioned earlier, the actual annual rate of return does not exceed 2%.
The increase in foreign exchange reserves is not unique to China. Two scholars in new york systematically analyzed the huge opportunity cost paid by developing countries for the increase of foreign exchange reserves [5]. They believe that the price paid by East Asian countries in accumulating foreign exchange reserves in the past decade is equivalent to more than 20% of the gross national product. The author believes that the analytical perspectives of the two scholars are unique and worth pondering.
Nothing for nothing. With regard to the advantages and disadvantages of China's foreign exchange reserves, domestic media, institutions and even academic circles put more emphasis on "advantages" and less on "disadvantages" (cost or opportunity cost). The purpose of this article is to draw people's attention to this problem. As for how to implement this long-term plan in the future if the public has established the awareness of reducing foreign exchange reserves, this is a very complicated issue and can be further discussed. Here I can only talk about my views in rough lines:
1. "Earning foreign exchange through export" can be a part of the current economic policy, but it should not be the main or decisive part of the economic goal of * * *. * * *, the main responsibility is to allocate domestic resources more effectively and fairly, including capital resources. On the one hand, borrowing money at home, on the other hand, buying foreign bonds on a large scale from abroad, which is neither beneficial nor fair in itself (suspected of robbing the poor to help the rich). The author believes that it is not a bad thing to let the RMB appreciate properly without causing a trade deficit, which will help improve people's purchasing power and attract foreign investors. The goal of "earning foreign exchange through export" should be replaced by the macro goal of "overall balance of import and export".
2. If the public has established the consciousness of "reducing foreign exchange reserves", then the actual operation of converting foreign exchange into RMB should adopt the principle of step by step to minimize the harm to domestic interests and international financial order. In the near future, we should stop the growth of foreign exchange reserves, reduce the purchase of foreign currency and foreign bonds, and gradually reduce the holding of foreign bonds and foreign exchange in the future. In order to reduce the pressure of RMB appreciation, people should further relax the possession, circulation and use of foreign currency, and at the same time appropriately increase the RMB money supply and further reduce interest rates. The weak domestic price index in recent years also shows that there is room for further lowering interest rates.
(summarize the main points yourself. Hehe)
What impact does the national foreign exchange reserve have on the national economy? Only when there is a trade surplus can we reserve a large amount of foreign exchange. After a long time, neighboring countries are unwilling and prone to trade frictions. How much foreign exchange is collected when there is a surplus, and the same amount of domestic currency is issued at the same time, which is easy to cause inflation. Large foreign exchange reserves are also a risk. If the currency depreciates, it will cause great losses.
What is the impact of foreign exchange reserves on the country? The increase of foreign exchange reserves can not only enhance the country's macro-control ability, but also help to maintain the international reputation of the country 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.
The impact of the depreciation of the US dollar on China's foreign exchange reserves: the depreciation of the US dollar, that is, the appreciation of the RMB-the reduction of the amount of dollars converted into RMB per unit of commodity exports-the reduction of corporate profits-the reduction of export enthusiasm or profits of export enterprises or the closure of export enterprises-the reduction of exports-the development of balance of payments in the direction of deficit-the increase of foreign exchange reserves that need to make up for the balance of payments deficit-the decrease of foreign exchange reserves.
How much does China's foreign exchange reserve account for in the world? 20 17 (US$ 100 million) 3005 1.24.
The scale of China's foreign reserves is still close to 30% of the world's foreign reserves, ranking first in the world's foreign exchange reserves, 2.6 times and 4.5 times that of the second-ranked Japanese and the third-ranked Swiss respectively.
The impact of RMB appreciation on foreign exchange reserves is reflected in the following aspects:
First, the impact on the purchasing power of foreign exchange reserves. Due to the huge stock of foreign exchange reserves in China, which has exceeded $800 billion by the end of 2005, a small appreciation of RMB can cause great changes in the purchasing power of foreign exchange reserves. How to prevent RMB appreciation from causing huge losses to the purchasing power of foreign exchange reserves is an important issue.
Second, the impact on the flow of foreign exchange reserves. Foreign exchange reserves are mainly formed by the net inflow of current account and capital account, and the change of RMB exchange rate will affect the net inflow of foreign exchange funds, thus affecting the change of foreign exchange reserve scale.
Third, the impact of RMB appreciation on the management and use of foreign exchange reserves. In the case of RMB appreciation, the purchasing power of foreign exchange reserves suffers losses, while the yield of foreign exchange reserves is low. With the appreciation of RMB, there are some favorable investment opportunities. How to make rational use of foreign exchange reserves to improve income is also a problem that needs to be reconsidered.
What is the impact of China's unique high foreign exchange reserves? I'll give you a brief explanation. You can develop it yourself, which only represents my personal opinion.
Why do you need to reserve foreign exchange:
The emergence of foreign exchange reserves is due to the integration of the world economy and the fact that the core currency of the monetary system is not RMB (at present, the US dollar, the euro and the pound are dominant), so there are foreign exchange reserves, otherwise there is no need for foreign exchange reserves. If RMB is the core of the monetary system, then reserve RMB.
What's the use of reserving foreign exchange?
It is precisely because these countries in the world economy regard the dollar, the euro and the pound as the core of the monetary system. Therefore, when countries in the world conduct economic exchanges, these currencies are equivalent, and only these currencies are accepted for settlement, and other currencies are not accepted. For example, a company in China wants to trade with a company in Thailand. Here's the process. China Company wanted to change RMB into US dollars, and then changed US dollars into Thai baht before it got it. Usually, the reason why RMB is directly exchanged for Thai baht is because the process of exchanging dollars in the middle is omitted. In fact, in the background, the settlement process is carried out by the country's foreign exchange system. The middle process is obviously omitted. In fact, it is still settled between countries, and it is settled in US dollars. Without foreign exchange reserves, foreign exchange settlement is not allowed.
From the simple explanation above, we should be able to know the positive impact.
1, a symbol of strength. As long as we join the world economic system and the economy is globalized, foreign exchange reserves are a symbol of national economic strength, and the total amount of foreign exchange reserves will always be greater than the value paid in the foreign trade system. Otherwise, the transaction cannot be carried out and foreign exchange borrowing is needed. This is a debt.
2. Foreign exchange reserves determine the domestic market environment. Foreign exchange reserves can be traded in the exchange rate market, thus controlling the stability of the exchange rate. If the exchange rate is stable, international trade will be smooth, and it will not have an impact on international trade and is suitable for investment.
With more reserves, we can lend to other countries and promote international relations.
4. The amount of foreign exchange reserves directly reflects the foreign trade volume, and indirectly reflects the country's low position in the world economy, thus affecting the monetary system, and making RMB the core currency of the monetary system is the ultimate goal. At that time, foreign exchange reserves will be unnecessary, and other countries will need to reserve RMB for foreign exchange.
The impact of the increase in foreign exchange reserves on China: 1. China is increasingly becoming the safest country for investment; 2. The export structure is gradually improving.
Chen Huai said that the inflow of foreign capital is an important source for the increase of foreign exchange reserves. In recent years, especially after the "9 1 1" incident, China has become one of the safest countries for investment in the world. At present, Japan's economy is sluggish, the dollar is unstable, and there are many uncertainties in the euro. More and more investment comes not only from developed countries, but also from developing countries.
Will the continuous growth of foreign exchange reserves put pressure on the appreciation of RMB? In this regard, Chen Huai believes that the long-term surplus of foreign exchange reserves is only one aspect of RMB appreciation, and currency appreciation depends on many factors, such as the relationship between supply and demand of foreign currencies, changes in interest rates of different currencies, expectations for the future economy, and the structure of long-term and short-term debts. At present, the factors that balance the value of RMB are far more powerful than those that promote the appreciation of RMB.
Will a country's foreign exchange reserves play a role in the financial crisis? This should be treated dialectically.
On the one hand, our country now holds the US dollar as the main foreign exchange reserve, but in recent years, the US dollar has depreciated, and our foreign exchange assets have shrunk, so we can't buy what we should buy with the same amount of foreign exchange.
On the other hand, holding a large amount of foreign exchange reserves is still useful. Generally speaking, foreign exchange reserves are the common currency in the world. If funds or other organizations sell our currency, we will use foreign exchange to buy in large quantities, so that when we sell and buy, the exchange rate will be balanced and stable. If the foreign exchange reserves are insufficient and the seller's strength is too strong, our currency will depreciate, that is, the RMB will become less and less valuable internationally, which is very unfavorable to China's imports.