Chinese Foreign Exchange Reserve Moderate Scale Research

In2007, the United States triggered a worldwide financial crisis, the subprime crisis, the crisis has serious impact on the contemporary financial credit system.The U.S. subprime mortgage crisis originated in the United States subprime loans and securities markets, derived from its also including many hedge funds. The impact of the financial crisis has spread from developed countries to emerging markets and developing countries, and to the real economy from the financial sector development, its wide range, influence depth, the impact strength, the rapid development, is the unexpected.The dollar is the currency of the international reserves, in order to maintain the state credit and normal trade and investment ties, other countries need to hold dollars. The U.S. financial crisis will inevitably produced profound effect to the foreign exchange reserve system of the rest of the world, especially emerging economies.The U.S. financial crisis, on the one hand, enable people to recognize the adequate foreign exchange reserves in the role of resist risk, on the other hand make people realize the importance of foreign exchange reserve assets value. People began to seek a new way to manage foreign exchange assets, this way of management of foreign exchange reserves will combine together of safety, liquidity and profitability.Maintain a moderate amount of reserves is the key of the foreign exchange reserve management. At present, in the moderate scale of foreign exchange reserves, there are four of the more popular analysis method, ratio analysis, cost-benefit analysis, linear regression method and qualitative analysis. Each kind of analysis method, has its limitations. So, when study the moderate scale of foreign exchange reserves cannot copy theory, to combine the actual situation, research their respective problems.China have six aspects needs for foreign exchange reserves, the need of import, pay for the foreign debt, maintain a stable exchange rate, return the foreign profits, and guard against financial crisis. I will agarwal model combined with the demand for foreign exchange reserves, an extension of agarwal model is established:R=[D/lgπ(lgm+lgq2-lgql)+SD+l0%TD+15%T+2.8%CFDI+2.5%GDP]/0.9I use the extended agarwal model to our country1994-2011empirical analysis has been done for the moderate scale of foreign exchange reserves. Conclusion:from2002to2011, China have excess foreign exchange reserves.Huge foreign exchange reserves has brought adverse effects to our country’s economy, so have to control the scale of Chinese foreign exchange reserve, optimize the foreign exchange reserve asset management.For out of stock of moderate scale of foreign exchange reserves, should be actively to look for a suitable reserve investment route.For the incremental part of foreign exchange reserves, the key point of management is that by changing the economic growth mode in our country, the reform of RMB exchange rate formation mechanism.This article altogether is divided into seven chapters, the first chapter mainly introduced the research background, significance, methods, etc. The second chapter mainly analysis of the us financial crisis’s influence on the foreign exchange reserves and change trend of China’s foreign exchange reserves after the crisis. The third chapter analyzed the post-crisis era of foreign exchange reserves continue to grow in China and analyzed the advantages and disadvantages of China holds huge foreign exchange reserves. The fourth chapter generalizes the theory of the demand for foreign exchange reserves, I tried to explain to find Chinese foreign exchange reserve moderate scale analysis method. Chapter5I extended agarwal model is established, and used this model to do empirical analysis. Sixth chapter I put forward the idea of hierarchical optimization management of foreign exchange reserves. Chapter7summarizes the full text.This article adopts the research methods mainly include:the empirical analysis, comparative analysis, standard analysis method, the enumeration method, the graph method.The innovation of this paper lies in:1, On the research Angle of view, I keep up with the development of era, and based on the present situation of Chinese foreign exchange reserve. I described the change trend of Chinese foreign exchange reserve after the financial crisis. I analyzed the foreign exchange reserves continue to grow after the financial crisis in China. I discusses the post-crisis demand for foreign exchange reserve after the financial crisis in our country, etc.2, combining with the actual situation of our country, the extension of agarwal model, foreign exchange reserve scale of1994-2004has carried on the empirical analysis and conclusions are drawn.