Management of China's foreign exchange reserves: a case study on the state administration of foreign
Summary for non-specialistsWith rapid economic growth and continuing economic integration with the outside world, China's foreign exchange (FX) reserves have witnessed considerable accumulation. As of 2009 it amounted to USD 2.4 trillion, accounting for just under 1/3 of the global FX reserves. Rapid growth of FX reserves at this speed has created various problems, e.g. inflationary pressure and huge holding costs.In this paper by analyzing the SAFE - Chinese governmental agency in charge of administering the FX reserves in the country, we review how Chinese FX reserves are currently managed and their performance so far. Then, in the light of these findings and borrowing literature from the current debate on Sovereign Wealth Funds (SWFs), several reform proposals are presented regarding how to better tackle the problems relating to these rapidly accumulated FX reserves in China. It is argued that the proposed reform options not only benefit China, but also help in addressing some wider issues (e.g. global imbalances), therefore contributing to a more harmonious global economy.
|Date of creation:||Jul 2010|
|Date of revision:|
|Contact details of provider:|| Postal: |
Fax: +32 2 298.08.23
Web page: http://ec.europa.eu/economy_finance/index_en.htm
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Hongyi Chen & Lars Jonung & Olaf Unteroberdoerster, 2009.
"Lessons for China from financial liberalization in Scandinavia,"
European Economy - Economic Papers
383, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
- Hongyi Chen & Lars Jonung & Olaf Unteroberdoerster, 2014. "Lessons for China from Financial Liberalization in Scandinavia," Asian Economic Papers, MIT Press, vol. 13(1), pages 1-44, February.
- Hongyi Chen & Lars Jonung & Olaf Unteroberdoerster, 2009. "Lessons for China from Financial Liberalization in Scandinavia," Working Papers 262009, Hong Kong Institute for Monetary Research.
- Edwin M. Truman, 2007. "Sovereign Wealth Funds: The Need for Greater Transparency and Accountability," Policy Briefs PB07-6, Peterson Institute for International Economics.
- Zhang Yu Xuan & He Fan, 2008.
"China's Sovereign Wealth Fund : Weakness and Challenges,"
Development Economics Working Papers
21985, East Asian Bureau of Economic Research.
- Ming Zhang & Fan He, 2009. "China's Sovereign Wealth Fund: Weakness and Challenges," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 17(1), pages 101-116.
- Zhang Yuxuan & He Fancass, 2008. "China's Sovereign Wealth Fund : Weakness and Challenges," Finance Working Papers 22836, East Asian Bureau of Economic Research.
- Roland Beck & Michael Fidora, 2008.
"The impact of sovereign wealth funds on global financial markets,"
Intereconomics: Review of European Economic Policy,
Springer, vol. 43(6), pages 349-358, November.
- Roland Beck & Michael Fidora, 2008. "The impact of sovereign wealth funds on global financial markets," Occasional Paper Series 91, European Central Bank.
- Bracke, Thierry & Fidora, Michael, 2008. "Global liquidity glut or global savings glut? A structural VAR approach," Working Paper Series 0911, European Central Bank.
When requesting a correction, please mention this item's handle: RePEc:euf:ecopap:0421. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ECFIN INFO)
If references are entirely missing, you can add them using this form.