New strategy needed for forex reserves
Source: Xinhua |
April 25, 2011, Monday
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Print Edition
Print Edition
CHINA should reduce its excessive foreign exchange reserves and further diversify its holdings, Tang Shuangning, chairman of China Everbright Group, said on Saturday.
The amount of foreign exchange reserves should be limited to between US$800 billion to US$1.3 trillion, Tang told a forum in Beijing, saying that the current reserves are too high.
China's foreign exchange reserves rose by US$197.4 billion in the first three months of this year to US$3.04 trillion by the end of March.
Tang's remarks echoed the stance of Zhou Xiaochuan, governor of China's central bank, who said last Monday that China's foreign exchange reserves "exceed our reasonable requirement" and that the government should upgrade and diversify its foreign exchange management using the excessive reserves.
Meanwhile, Xia Bin, a member of the monetary policy committee of the central bank, said last Tuesday that US$1 trillion would be sufficient. He added that China should invest its foreign exchange reserves more strategically, using them to acquire resources and technology needed for the real economy.
Tang also said that China should further diversify its foreign exchange holdings. He suggested five channels for using the reserves, including replenishing state-owned capital in key sectors and enterprises, purchasing strategic resources, expanding overseas investment, issuing foreign bonds and improving education and health.
The amount of foreign exchange reserves should be limited to between US$800 billion to US$1.3 trillion, Tang told a forum in Beijing, saying that the current reserves are too high.
China's foreign exchange reserves rose by US$197.4 billion in the first three months of this year to US$3.04 trillion by the end of March.
Tang's remarks echoed the stance of Zhou Xiaochuan, governor of China's central bank, who said last Monday that China's foreign exchange reserves "exceed our reasonable requirement" and that the government should upgrade and diversify its foreign exchange management using the excessive reserves.
Meanwhile, Xia Bin, a member of the monetary policy committee of the central bank, said last Tuesday that US$1 trillion would be sufficient. He added that China should invest its foreign exchange reserves more strategically, using them to acquire resources and technology needed for the real economy.
Tang also said that China should further diversify its foreign exchange holdings. He suggested five channels for using the reserves, including replenishing state-owned capital in key sectors and enterprises, purchasing strategic resources, expanding overseas investment, issuing foreign bonds and improving education and health.
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