The source of Ch forexbrokercashbackas bestcashbackprogramsforex Best forex trade cashback Bestforextradecashback Foreign exchange reserves cashback forex a concept of balance of payments, so talk about how foreign exchange reserves are accumulated, we should look at the balance of payments foreign exchange reserves are roughly three main sources: first is the source is mainly through the trade surplus; second is the long-standing implementation of preferential policies for the inflow of FDI in China, so it leads to a large inflow of FDI, FDI inflow after conversion into RMB The process will also form foreign exchange reserves on the other hand, the profits created by FDI inflows into China basically have not been remitted abroad, which further increases the impact of FDI inflows on the growth of foreign exchange reserves The third is due to the capital flows outside the trade surplus and FDI from 2001 to the present, as the expected appreciation of the RMB has been transformed into the reality of appreciation, leading to a large amount of hot money inflows into China, which has intensified the growth of foreign exchange reserves China Now there is no full opening of the capital account, so foreign investment in Chinas capital market is now only able to go through QFII, which is currently only over $10 billion in size, so the vast majority of capital inflows through trade and FDI are not through the formal channels of QFII, but through various underground money changers or false trade surpluses, etc. For the economic attributes of foreign exchange reserves, the According to the current foreign exchange management system in China, enterprises and individuals are not allowed to have foreign exchange in their hands beyond the scope of the policy, and in order to buy foreign exchange that comes into the country in various forms, the central bank must issue bonds or print more money, thus releasing a large amount of base money. Therefore, although foreign exchange reserves are an asset of the central bank, this asset is formed through the central banks liabilities The second dimension; different sources of foreign exchange reserves have different economic significance: the growth of foreign exchange reserves derived from the current account surplus is the accumulation of domestic savings and is a countrys The growth of foreign exchange reserves mainly from the financial account is actually an increase in liabilities in exchange for the growth of foreign exchange reserves, which has the nature of borrowed reserves and thus has a certain degree of vulnerability From the balance of payments, the growth of foreign exchange reserves in China in recent years is mainly due to the huge net capital inflows, which is basically also an increase in foreign liabilities in exchange for the growth of foreign exchange reserves  The analysis of the origin process and economic properties of foreign exchange reserves shows that foreign exchange reserves are not an income of the central bank, or in the balance sheet formed by the central bank and the Ministry of Finance combined, foreign exchange reserves are not a fiscal fund of the government, but an asset of the central bank in the nature of liabilities
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