The Research On Moderate Scale Defining Of Foreign Exchange Reserve Of China

Since China's foreign exchange administration reform in 1994, its foreign exchange reserve keeps on increase rapidly. At the bottom of 2006, the scale of our country's foreign exchange reserve has reached more than 1000 billions US dollars. China now is the second largest foreign exchange reserve holder in the world. It gets the attention of the whole world that our foreign reserve keeps on increase on the base of huge scale. Although it can bring some positive effects to the economy, the substantial foreign exchange reserve has brought many negative influences to Chinese economic development. Accordingly, studies on the optimum scale of Chinese foreign exchange reserve and putting forward relevant propositions have become the hot issues in the research on Chinese macro economy.This thesis is based on the analyses of moderate scale of foreign exchange reserve and select Agarwal model according to Chinese situation. It is used to analyze moderate scale of foreign exchange reserve of China after being modified. Then it results the scale is too huge, The thesis then, based on the analysis result, analyzes the reason and economic influence of Chinese excessive reserve scale, and puts forward relevant policy propositions about Chinese reserve scale management.The chapter 1 is the preface of this thesis, which introduces the grounding and importance of the thesis,the situation of researching,the method and the frame of this article. The chapter 2 summarizes international reserve and foreign exchange reserve, and then analyzes the meanings of foreign exchange reserve and target area of optimum scale. In the chapter 3 this thesis reviews the models of foreign exchange reserve optimum scale, which includes proportion analysis, wardrobe theory, demand function analysis, cost and revenue analysis, then, selects Agarwal model. The chapter 4 Agarwal model. is modified according to Chinese situation and used to analyze the moderate scale of foreign exchange reserve of China. It comes to that foreign exchange reserve of China is more the 600 billions. T he thesis makes the conclusion that the scale of Chinese foreign exchange reserve in recent years is excessive. The chapter 5 analyzes the reason and the economic influence of the excessive scale of Chinese foreign exchange reserve, and then The chapter 6 puts forward the policy propositions about scale management of Chinese foreign exchange reserve. It first analyzes the reason from three aspects:direct reason, institutional reason and essential reason, and then analyzes the economic influence of excessive scale in which negative influences are emphatically introduced. It lastly puts forward the basic ideas of reserve management and the policy propositions of scale management of Chinese foreign exchange reserve. The thesis thinks that the propositions are helpful for keeping Chinese reserve scale optimum reserve. The chapter is the conclusion of the thesis, which concludes the whole article and put forward the expectation.