Research On Utility Optimization And Its Countermeasures Of Our Foreign Exchange Reserves

With the rapid development of international economic integration and the continuous expanding of international trade, until the end of December 2007, the total sum of our foreign exchange reserve has reached $1528.2 billion and still makes a steady growth per month. It not only exerts profound impact on our macro-economy, but also brings new challenges to its management. How to operate the large amount of foreign exchange reserve, in the academia, is supposed to be a matter with fierce debates. However, after a minute inspection of them, it is clear that all these debates concentrate on such issues as the size, the sources and the structure of foreign exchange reserves separately, which is also not related to how to use them tactically and effectively. So it is necessary for China to do further research on the utility optimization of its reserves.In our view, on the background of becoming the largest foreign exchange reserve's country, the research of foreign exchange reserve and its utility optimization should be conducted in a systemic manner from the Perspective of a Pluralistic and integrated Concept. In January 2007, my article, called"The Utility Optimization and application strategies of Our Foreign Exchange Reserves"was published in social sciences in ningxia, which initially embark on the research of foreign exchange reserve and its utility optimization. And this dissertation is just the achievement of the research before. In terms of the unilateral theory of foreign exchange reserve abroad and home, firstly, this paper puts forward the concept of foreign exchange reserve's utility optimization, whose definition is made in qualitative and quantitative respect. Then being based on the comparison of traditional foreign exchange reserve's theories. It establishes four influential factors of utility optimization-source, size, structure and exertion. The four factors appear as the whole thing affecting mutually instead of independent systems. Secondly, by the comparison of research method concerned to the foreign exchange reserve's utility optimization, it fixes on its own research method, then analyze the utility optimization of four factors and their countermeasures. Lastly, according to the summarization of this new theory, the paper lists its basic conclusions, points out the creative respects and the direction I should strive to study in the future.