China's Foreign Exchange Reserves Will Break $4 Trillion.

　　 The growth rate is continuously high.

Influenced by the withdrawal of QE from the United States and the flight of large numbers of international capital, many emerging market countries are caught up in the dilemma of resisting excessive external shocks and excessive consumption and insufficient balance. Instead, China's foreign exchange reserves are rising steadily.

By the end of 2013, the balance of the country's foreign exchange reserves was US $3 trillion and 820 billion. The people's Bank of China recently announced that as of the end of 3 2014, the balance of foreign exchange reserves increased by 130 billion US dollars at the end of 2013.

For the reasons for the increase in external reserves, analysts pointed out that in the four quarter of 2013, external demand began to pick up gradually, and the export of goods trade increased. At the same time, domestic economic growth slowed down, international commodity prices were low, and import growth tended to be stable, making the surplus of imports and exports continue to be high. On the other hand, with the increase of RMB appreciation and the positive spread of foreign currency, cross-border capital will accelerate inflow to boost foreign exchange reserves.

RMB in the first quarter of this year exchange rate Devaluation has prevented some inflow of arbitrage funds, but the trend of foreign exchange reserve growth has not changed.

"Although China's economic growth has slowed down, it is still far ahead of other countries, and RMB assets are still attractive. China is still facing the pressure of capital inflow. At the same time, the domestic real interest rate is higher than other countries, stimulating the external arbitrage capital inflow. These are all reasons for the increase in external reserves. " The director of the Research Institute of the Institute of finance of the Chinese Academy of social sciences has just told this reporter.

　　 There will be a slight increase this year.

Despite the downward pressure on the domestic economy in the first quarter of this year and the depreciation of the renminbi, the fundamentals of the economy remain good, and the two quarter is expected to rebound. The industry expects that the scale of external reserves will continue to rise in 2014, but the growth rate may be lower than that in 2013. Up to now, the scale of foreign reserves has nearly $4 trillion, so whether optimistic or conservative estimates, the scale of foreign reserves in 2014 exceeded US $4 trillion, and there is no suspense.

"The size of this year's external reserves depends on the internal and external situation". We have just analyzed, from the outside, if the US dollar interest rate goes up and the interest rate spreads between China and the United States decrease, our foreign reserves growth may decrease. If the interest rate is still maintained, the arbitrage funds will be strong and the scale of foreign reserves will not decrease. From within, if the RMB exchange rate depreciation is expected to be obvious, it will curb arbitrage funds and reduce foreign reserves; if RMB appreciation, foreign reserves will still increase significantly.

"From the current US exit from QE and RMB exchange rate fluctuations, the momentum of international arbitrage funds is likely to weaken, and the growth of foreign exchange reserves this year will slow down," he said. Zeng just said.

Lian Ping, chief economist of Bank of communications, predicts that the size of China's foreign exchange reserves will increase slightly by the end of 2013. Wang Zhihao, chief economist of Standard Chartered China, predicts that by the end of 2014, the scale of China's foreign reserves will impact $4 trillion and 400 billion.

　　 Proposed increase Gold reserve

With huge foreign exchange reserves, China can straighten its wings when doing many things in the world. For example, in the face of international liquidation and financial risks, coping ability is strong; enterprises "go out" when there is sufficient financial security; the international community's expectations for China are also relatively stable.

However, too much storage is also a hot potato. Experts point out that the central bank will have to invest more basic currencies to buy more foreign exchange from commercial banks. Too much money can easily lead to inflation and currency depreciation. It has also become one of the causes of excess liquidity.

Yu Yongding, a member of the Chinese Academy of Social Sciences, said that after 20 years of double surplus of current account and capital account, China's foreign exchange reserves will exceed US $4 trillion, and the marginal cost of each US dollar that continues to increase is much higher than that of potential income. Under such conditions, it is no doubt that accumulating foreign exchange reserves is not conducive to production.

From the external storage structure, dollar And euro assets accounted for a large proportion. The long depreciation of the US dollar has resulted in the shrinking of a large number of US dollar assets in our foreign reserves. From the point of view of investment, the US Treasury bonds are important investments in foreign reserves. The US government has diluted the huge debt by printing money machine, which is equal to giving some of the debt burden to China.

In this regard, the industry believes that gold is the best tool to hedge against the risk of depreciation of the US dollar. It is recommended to increase the proportion of gold in foreign reserves as soon as possible in structure. On investment, we must establish a diversified investment system. On the scale, Xie Taifeng, President of the school of finance, Capital University of Economics and Business, proposed to reduce the current scale of foreign reserves: to import foreign resources products and consumer goods needed by foreign exchange.

How to fundamentally solve the problem of huge foreign reserves? Zeng Gang believes that one is to reform the current foreign exchange management system, and the two is to exchange the formation mechanism of marketization. Xie Taifeng suggested that we should change the system of foreign exchange settlement and sale, and remit the money to the people. At the same time, we should change the mode of economic development based on exports and investment, and achieve economic growth by consumption. If economic growth still depends on investment and exports, the momentum of external reserves will not change.