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15:11, July 16, 2009 |
Rapid growth of forex reserves might lead to RMB appreciation pressure
Surging forex reserve marks inflow of international capital
On July 15 the People's Bank of China declared that national foreign exchange reserves had reached 2.13 trillion USD. However, foreign exchange reserves held by individuals and businesses accounted for only 150 billion USD, with an overwhelming majority held by the government.
At the end of March, China's foreign exchange reserves accounted for 29.9 percent of the world's total. Abundant foreign reserves help to withstand the global financial crisis and cope with a reverse flow of international capital.
Zhang Bin, an associate researcher from the International Finance Research Center under the Chinese Academy of Social Sciences, said that: "We should promote the process of putting foreign exchange reserves in the hands of the people to better meet the reasonable demands for reserves by businesses, financial institutions and individuals. We should particularly support Chinese enterprises "going global" to relieve the surplus of domestic production and to make Chinese enterprises more competitive in the global market."
Foreign exchange reserves can also support the process of bringing foreign resources to China. The reserves can be used to buy advanced technology and important resources. Zhang suggested that foreign exchange reserves could be used to attract overseas human resources in the education sector to develop vocational training in China.
By People's Daily Online
http://paper.people.com.cn/rmrb/html/2009-07/16/content_296873.htm
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