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Is China's Foreign exchange reserves too much? nearly 1/2 GDP [Copy link] 中文

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Post time 2011-5-1 08:43:11 |Display all floors
By 2010, China's GDP had reached RMB 39.7983 trillion, or $6.04 trillion.

By 2010, China's Foreign reserve has reached $ 3 trillion.

Is China's Foreign exchange reserves too much? nearly 1/2 GDP
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Post time 2011-5-1 08:51:40 |Display all floors

What's reserves? In history:

the offcial international reserves, the means of official international payments, consisted only of Gold.

Since 1944, the reserves has started to consist U.S dollar.
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Post time 2011-5-1 09:05:32 |Display all floors
Buying and selling official international reserve to attempt to influence exchange rates.

Buying U.S dollar would push its value higher. (On the contrary, sellig would push lower)
buying U.S dollar would push Chinese yuan's value lower and trigger domestic inflation.

Large reserves of foreign currency allow a government to manipulate exchange rates. Also, the greater a country's foreign reserves, the better position it is to defend itself from speculative attacks on the domestic currency, avoid the emergency risks, a sudden low demand of its own currency, a sudden foreign exchange crisis or devaluation.  

fluctuations in exchange markets can result in huge losses or in huge benefits. For example, if the U.S. dollar weakens on the exchange markets, the decline results in a relative loss of wealth for China.
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Post time 2011-5-1 09:26:29 |Display all floors
List of the top 10 largest countries or regions by foreign exchange reserves:

China: $3.045 trillion (Mar 2011)
Japan: $1.116 trillion (Mar 2011)
Eurozone: $0.77 trillion (Japan 2011) (the total European countries)
Russia: $0.513 trillion (Apr 2011)
Saudi Aabia: $0.449 trillion (Feb 2011)
Taiwan, China: $0.393 trillion (Mar 2011)  
Brazil: $0.325 trillion (Apr 2011)  
India: $0.308 trillion (Apr 2011)  
South Korea: $0.299 trillion (Mar 2011)  
Switzerland: $0.278 trillion (Feb 2011)
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Post time 2011-5-1 09:27:33 |Display all floors
China: 1/2 GDP
Japan: 1/5 GDP
Eurozone: 1/20 GDP
Russia: 1/3 GDP
Saudi Aabia: 1 GDP
Taiwan, China: 1/1.1 GDP  
Brazil: 1/6.5 GDP  
India: 1/5 GDP  
South Korea: 1/7 GDP  
Switzerland: 1/2 GDP
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Post time 2011-5-1 09:28:28 |Display all floors
The rate of dependence on foreign trade:
by import:
1/4 GDP
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Post time 2011-5-1 09:31:09 |Display all floors
Why had  Chinese government not bought Gold as major foreign exchange Reserves before the price of Gold was rising a few years ago?

But U.S. dollar?
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