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China's forex reserve tops 1.33 trillion USD (3) |
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21:55, July 11, 2007 |
Wang predicted that the current large amount of forex reserve may decrease at the end of 2007 as a result of a series of macro-economic control policies that have been taken by the central government.
To balance the rising trade surplus which has brought increasing trade frictions between China and its trade partners, the country has lowered export rebates on over 2,200 types of goods and revoked that on some 500 resources goods or goods consuming high energy or causing environmental pollution as of July 1.
Wang attributed the sharp rise in trade surplus and forex reserve in June partly to the adoption of the export rebate adjustment.
China plans to launch a state forex investment company to make better use of the country''s huge foreign exchange reserve. The forex investment company, still under preparation, has made its first investment to buy non-voting shares valued at 3 billion U.S. dollars of the U.S. private equity group - the Blackstone Group.
At the end of June, China''s top legislature has given green light to the issuance of 1.55 trillion yuan special treasury bonds by the Ministry of Finance to buy 200 billion U.S. dollars forex reserve to finance the state forex reserve company.
The move will both reduce China''s forex reserve and curb the excess liquidity of the country, said Li Yang, director of the finance research institute of the Chinese Academy of Social Sciences.
Source: Xinhua
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