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China's foreign exchange (Forex) reserve rose 104.7 percent in the
past five years from 1997 to 2002, from US$139.9 billion to
US$286.4 billion, and the country has thus become the world's
second largest nation with biggest Forex reserve only after Japan.
Guo Shuqing, vice-governor of the People's Bank of China, the
central bank, and director of the State Administration of Foreign
Exchange, quoted the figures from Premier Zhu Rongji's Government
Work Report to the on-going First Session of the 10 National
People's Congress.
Since revamping the structure of its foreign exchange in 1994, he
noted, China has recorded a balanced international payment with a
steady rise in the sum of its Forex reserve.
The country's Forex reserve is adequate especially for a developing
nation, whose own currency, the RMB yuan, remains inconvertible and
exchange rates are very stable, he explained.
Guo, who is attending as a member of the 10th Chinese People's
Political Consultative Conference (CPPCC) the current First Session
of the CPPCC, said there is no international criteria on how much a
nation's foreign exchange reserve should have, and that all
countries have to build up their own reserves by taking their own
situation into account.
Between 1989 and 2001, the world's total foreign exchange reserve
went up by almost two folds, with the developing countries
increasing by four folds. During the period, the proportion of
developing nations' Forex exchange reserve in the world's total
increased from 36.7 percent to 61.8 percent, and this was in sharp
contrast with the status of developed nations in this regard.
China's bulging Forex reserve could help boost the national image
and that of local companies, encourages investment from overseas,
prevent and dilute international financial risks, and enhance the
capabilities of the Chinese government on macroeconomic control,
the official said.
Moreover, he acknowledged, the central bank has both expertise and
related professional knowledge to make profits by investing part of
its Forex reserve on the international market.
(Xinhua News Agency March 10, 2003)
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