中国需要多元化的投资

China holds a huge amount of foreign currency reserves and some worry that that could cause some risks to the country’s economy. Here are some analysts' comments on China’s reserve size and management.

The foreign currency reserve is a key component of a country’s financial stability. China’s large reserves have prevented a fast appreciation of the RMB over the past decade and helped the country’s economy manage the fallout from the QE policies of western central banks.

"The increase in our foreign currency reserves was caused by the maintaining of the stability of the RMB exchange rate," chief macroeconomic researcher of China Financial Futures Exchange Zhao Qingming said. "A stable exchange rate is actually good for exports. So, China’s overall employment and people’s incomes were good in past years."

Too large of a reserve, however, may cause increased stress on China’s inflation rate because of an increased supply of RMB. It also may be more difficult to manage the investment. Experts suggest that China should reduce its foreign currency reserve scale accordingly.

"According to our calculations, a foreign currency reserve worth 2 trillion dollars is enough for China because financial risks firstly depend on whether the country’s economy is strong," chief economist of Agricultural Bank Of China Xiang Songzuo said. "China is now the biggest country of export and manufacturing. There are a lot of money inflows trade surplus, speculative hot money are all coming in. Under this circumstance, a foreign currency reserve of one to two trillion dollars is actually fairly enough."

A large part of China’s foreign currency reserves is the purchase of American government debt. Experts say China should invest in more diversified areas.

"Maybe to increase the purchase of gold, to preserve or increase the value,"  senior researcher from China Minsheng Bank Wen Bin said. "We can invest in some financial assets, and we can also further expand the finances to purchase foreign currency reserves, to invest in some sovereign wealth funds like the China Investment Corp. Thereby we can make diversified use of our foreign currency reserves."

China participated in the establishment of the BRICS Development Bank, and injected 41 billion US dollars in the bank’s pool of currency reserves. Experts say that’s a good move by China to manage and use its foreign currency reserves.