Research On The Reasonable Scale Of China's Foreign Exchange Reserves In The New Situation

Foreign exchange reserves have a significant impact on the internal and external environment of a country's national economy.Since 2015,the scale of China's foreign exchange reserves has declined rapidly,which has once again aroused extensive discussion.Combined with the new situation of China,continuous trade frictions,the rise of foreign investment,the opening of the capital market and the growing use of foreign exchange from the private sector,it is necessary to research on the reasonable scale of China's foreign exchange reserves.Firstly,this article makes a general review of the research background and significance,research content and methods,and innovations and shortcomings.Secondly,make a review and analysis of the domestic and foreign literatures on the definition and research methods of reasonable foreign exchange reserves.Then,it reviewed the development process of China's foreign exchange reserves since the reform and opening up and the pros and cons of unreasonable scale.Thirdly,analysize the factors that affect China's foreign exchange reserves,including traditional factors such as import and export,foreign direct investment,foreign debt,and exchange rates,as well as new situations such as the rise of foreign investment,constant trade frictions,and the opening of capital markets.Then,an empirical analysis of the scale of China's foreign exchange reserves,through the improvement of the Agarwal model,and then calculate the reasonable scale of China's foreign exchange reserves from 1994 to 2019,found that China's actual scale since 2003 has exceeded a reasonable value,but in recent years It shows a tendency to move closer to a reasonable scale.Finally,based on the above research and drawing on useful experience at home and abroad,suggesting policy recommendations for the formation and management of China's foreign exchange reserves.