The Analysis Of The Scale And Structure Of China’s Foreign Exchange Reserve And Its Countermeasures Research

A country’s foreign exchange reserves have close relationship with some economic variables,such as the money supply, international balance of payments, national debt and local currency exchange rate. The scale of the reserves’accumulation, structure and application are reasonable or not directly related to the country’s national economic development and financial stability. In2011, China’s foreign exchange reserves reach up to＄3.1811trillion, which is the highest rate in the world.This paper firstly reviews the development of China’s foreign exchange reserves, analyses the reasons for the growth of the foreign exchange reserves and gets the main reason for the growth of china’s foreign exchange reserves,including some factors,such as the international balance of payments surplus,foreign exchange management system,exchange rate system, the RMB appreciation and foreign capital introduction.The paper utilizes the method of analysis on the proportion of China’s foreign exchange reserves to measure the scale, concludes the scale is far beyond moderate scale of foreign exchange quantity interval and analyzes the factors affecting the foreign exchange reserves. The excess of foreign exchange reserves can finance the unfavorable balance of international payments, maintain local currency exchange rate stability,fight international economic risks and pay off foreign debt,but it can bring some negarive effects at the same time,such as inflation,domestic currency appreciation, increasing opportunity cost, weakening the independence of monetary policy of the central bank, expanding trade friction and leading to imbalance of economic structure.Trough the analysis of currency structure of chinese foreign exchange reserves and assets structure,the paper concludes that exchange rate risk of U.S.dollar than too high, liquidity risk of the mismatch of time limit and income risk of single structure. China’s foreign exchange reserves bring some negative effects,such as the presure of funds outstanding for foreign exchange,the cost of sterilization policy, structural inflation and the waste of resources,summing up China’s foreign exchange reserves get irrational use and low income.Based on the reality of Chinese foreign exchange reserves and international environment,in order to change low efficiency and waste of foreign exchange reserves to gain maximum benefit,the paper puts forwards some suggestions about how to make use of excess reserves and has certain practical significance.