英语论文网

one country’s international payments. International payment surplus reflects that income from foreign countries is more than foreign spending or capital inflows are greater than capital outflow. Net income or inflows of one country become foreign currency assets through various channels in various forms. If the foreign currency assets are held by the monetary authorities, the foreign currency assets form one country’s foreign exchange reserves. So one country's main source of foreign exchange reserves is the international payment surplus—the International balance of payments current account surplus and capital and financial account surplus. Therefore, the following analysis is on the current account surplus and capital and financial account surplus.

1.2.1 Current account surplus

Generally speaking,China’s current account has maintained a surplus. It shows that a series of preferential measures taken byChinato encourage export worked, andChinagained a lot of foreign exchange reserves. The empirical analysis of China′s trade balance from 1979 to 2008 shows that the Chinese trade surplus is caused by the over-issued U.S. dollars; RMB appreciation has a small contribution to China′s surplus in the short term. In recent yearsChina's external terms of trade have moved around a lot in recent years, because of swings in raw commodity prices. But on average, the terms of trade dropped only 4 percent between 2007 and 2010, which had a modest impact on the current account[3]. The current account surplus for 2011 as a whole is likely to fall to 3.5 to 4 percent of GDP.

1.2.2 Capital and finance account surplus

China's capital and finance account has maintained trade surplus since 1994, and the projects accounted for a large proportion of international payments. It is an important source ofChina's foreign exchange reserves. The capital and financial account surplus in 2008 was $ 46.3 billion. Capital and financial account surplus of 2009 was $ 180.8 billion the surplus amount, which was significantly increased than that of 2008. This was mainly due to the impact of the international financial crisis beginning with theU.S.subprime mortgage crisis in 2008, making foreign direct investment inChinareduced. The difference between the capital and financial account and the direct investment account was $ 101.1 billion in 2010. This was mainly because the other investment account surplus was $ 72.4 billion, so the surplus amount was further expanded. It also reflected that a growing number of foreign investors were optimistic about RMB appreciation potential, and a large number of foreign exchange flowed intoChinain the form of short-term loans. FDI has significant positive effects on foreign trade, and the same to foreign trade surplus on foreign reserves. It is asserted that long-run equilibrium co-integration relation should exist among FDI, foreign trade and foreign reserves[4].

1.3 Composition ofChina’s foreign exchange reserves

According to the data from IMF, by the end of 2010, 61% ofChina’s foreign exchange reserves are invested in U.S. dollar assets, 26% in Japanese yen assets and 13% in assets of other currencies. Though China SAFE don’t disclose the composition of currency reserves, it can be estimated that the 本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。