The Size Of China's Foreign Exchange Reserves Management

The foreign exchange reserve is the core of the international reserve and the important issue of international finance. It influences the ability of one country regulating the international revenue and the exchange rate stability, so has been receiving the general concerns from both international financial institutions and governments. The key of the foreign exchange reserve theory is the scale. If the scale is not enough, the country will be in the danger of payment crisis, debt crisis and economic recession. But the over stand-by of foreign exchange will waste the domestic resource and be harmful to employment. In this dynamic world, the foreign exchange rate fluctuates frequently, the financial unrest is normal, and the globalization is ongoing. It's becoming more and more important for all the participants to study and settle down the foreign exchange scale and structure. This paper uses the frame of the factor approach, proceeding from the supply and demand, to study the main factors. Based on it, I try to make out the appropriate interval of the foreign exchange. And after analyzing the Japan experience, I also want to develop my solution to the problems and present my suggestions for future policy.