Zhou Xiaochuan, governor of Peoples Bank of China, commented that China's foreign exchange reserve is not high in the per capita terms.

In his speech delivered at China Development Forum that has been available on the official website of People's Bank of China, Zhou said that people tend to have new view and controversies around the quantity and standard of foreign exchange after the Asian Financial Crisis.

The statistics show China achieved a favourable trade balance of 100 billion US dollars last year. The volume of foreign exchange reserve by the end of December last year set a historic new high of 818.9 billion US dollar, next only to Japan.

Zhou said that if countries that are on the same level have difference in terms of foreign debt and FDI (Foreign Direct Investment), they are likely to have variation in foreign exchange reserve. External debts need to be paid and investors may ask for dividends or even withdraw their capital.

In addition, speculators will wait for an opportunity to withdraw their hot money. All these above-mentioned factors will influence the standard of the quantity of a country's foreign exchange reserves.

By People's Daily Online