Colossal foreign exchange reserves arouse debate
(Xinhua)
Updated: 2006-10-30 08:51
The very modest RMB fluctuation band gives speculators little room to rake in
profits. China's buoyant economic prospects are what investors really value, he
said.
Zhong Wei, professor with the finance research center of Beijing
Teachers' University, said hefty foreign exchange reserves require a brand-new
management system in China.
Zhong suggested that China fix foreign
exchange reserves at a level of no more than 800 billion U.S. dollars and
allocate the rest to useful purposes.
Zhong said the surplus reserves
could be used to purchase strategic materials for China's economic development,
to upgrade technologies in state-owned enterprises and to reform the state-owned
financial sector. The extra foreign exchange reserves could also be used to
introduce talented people from overseas and to boost the nation's social
security fund, Zhong said.
The State Administration of Foreign Exchange,
which has paid close attention to the increase in foreign exchange reserves,
says maintaining a balance between international income and expenses is one of
the major tasks for China's economic and social development.
The
administration is considering taking measures to slow down the increase in
foreign exchange reserves.
The management of foreign exchange reserves
will be improved so that they can be used as effectively as possible, according
to the administration.
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