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| Foreign Exchange Reserve Tops US$1 Trillion |
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China's foreign exchange reserve reached US$1.0663 trillion at the end of 2006, announced the People's Bank of China on Monday. The figure represents a 30.22 percent rise over 2005. It was the first time that China's foreign exchange reserve were confirmed to have exceeded US$1 trillion, according to the central bank. The bank's statistics show that the figure broke the US$1trillion mark at the end of October 2006. China reported a fresh increase of US$247.3 billion of foreign exchange reserve in 2006, standing US$38.4 billion higher than the relevant growth in 2005. China became the world's largest foreign currency depositor in the first half of 2006. Figures from the State Administration of Foreign Exchange show that China's foreign exchange reserve stayed below US$1 billion before 1979. The huge reserve reflects China's economic achievements since sweeping reforms began in the late 1970s, but observers worry that an excessive and fast-growing reserve of foreign exchange will endanger currency stability and liquidity. The further rapid growth of the reserve will continue to fuel speculation on the appreciation of the Renminbi (RMB), said Tan Yaling, a research fellow with the China International Economic Relations Association, under the central bank. Being the product of foreign trade revenue and foreign investment, China's huge reserve has been a source of worry for international critics, who argue that the RMB should be revalued and that the undervalued yuan gives Chinese products an unfair price advantage in international markets and hurts manufacturers from other countries. Its vast foreign exchange reserve means China has economic power that can influence the world, said Zhao Xijun, a professor with the Renmin University of China. Zhang Yansheng, an official with the National Development and Reform Commission, said that China should increase imports and improve the quality of foreign investment, while maintaining a reasonable growth of exports and use of foreign investment. (Xinhua News Agency January 16, 2007) |
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