China implements the system of settlement and sale of foreign exchange, which means that enterprises export foreign exchange, sell it to foreign exchange banks, and then buy it from foreign exchange banks when necessary. When foreign exchange banks buy more foreign exchange than sell foreign exchange, it causes the increase of foreign exchange positions (long positions), and banks sell foreign exchange to the central bank in order to close their positions, which causes the monetary authorities to increase foreign exchange reserves. The central bank buys in local currency. This is the currency problem caused by the increase of foreign exchange reserves.