China s foreign exchange reserves have reached 1 trillion yuan, do you still need to introduce forei

There is no necessary relationship between the introduction of foreign capital and the amount of foreign exchange reserves.

China's huge foreign exchange reserves are mainly to cope with changes in the international foreign exchange market and maintain the stability of China's monetary system.

However, the nature of the two issues is different from that of introducing foreign capital, which is only needed to promote the country's economic growth.

I don't agree with the above two:

1.In China, borrowing and investing is a political phenomenon. China's development model is dominated by local leaders.

Its administrative culture is to use resources for construction, preferably very large-scale construction. So, when exports are strong and liquidity is abundant, they will encourage the flow of money to large projects. Therefore, if the borrowing and spending culture can be sustained in the United States, it is likely that the borrowing and investing culture in China will not end.

2.Over the past five years, the number of financial professionals in commodities has probably grown tenfold. As long as the number of this group of people remains the same, then the commodity ** will continue to maintain a high level, because these people must go to great lengths to raise their lips and tongues in order to continue their business.

Experts are heavily employed to evaluate commodities, and their jobs are closely linked to the bull market in commodity markets, and it is this close connection that fuels the rebound of commodity bubbles.

Typically, there are three factors that trigger a bubble burst: panic, interest rate hikes, and a recession. The trigger for the Asian financial crisis in 1997 was panic.

A handful of savvy investors put pressure on the baht. Many people in Southeast Asia who know the inside story understand that the boom they are seeing is nothing more than a bubble, so they are waiting for the bubble to burst in order to sell the baht. When these people rush to quit, it leads to a crisis.

The interest rate hike in 1989 may have been the trigger for the bursting of Japan's bubble. The bubble in Japan is very large. The surplus value of note assets may reach four to five times GDP. Such a huge bubble is very fragile in front of any **.

In the 19th century, recession was often the trigger for the bursting of commodity bubbles. During this period, booms and booms break up the cyclical investment cycle, providing opportunities for speculators at each cyclical upswing. And when overcapacity triggers a drop in demand, the bubble bursts.

The current cycle is much like the 19th-century boom cycle. The difference is that today's financial system has a very complex way of absorbing risk. As a result, assets** have continued to rise, driving up demand, especially in the U.S. and investment in China.

It may be inflation, not overcapacity, that pulls this cycle down.

For all these reasons, China's development is actually overly dependent on foreign investment, with a bias towards real estate and industry. Rely on a strong macro shorting correction to stay strong. But when the policy is always beyond its strength, it is when inflation and the economy are in a downturn.

China's foreign exchange reserves are US$100 million.

The excessive growth of foreign exchange reserves may trigger the risk of bubble economy or inflation through the expansion of the base currency. The bubble economy and inflation are the two old enemies that threaten the stability and rapid growth of the economy. Although banks can absorb too much money through sterilization interventions, their effect is limited by the size of the market.

From the perspective of the market's affordability, the central bank has less and less room to issue bills on a large scale every year. Therefore, once the risk of inflation arises, the central bank will be in a very passive state.

Excessive foreign exchange reserves may reduce the level of income on China's foreign financial assets and the growth rate of wealth. This conclusion mainly comes from the following three viewpoints: First, the rate of return on China's foreign exchange reserves is far lower than the rate of return on foreign direct investment, and the difference between the two has to some extent constituted the loss of national wealth.

It is assumed that the average rate of return on foreign exchange reserves is around 3 per cent, while the average rate of return on foreign direct investment is at least 10 per cent. Second, the central bank needs to pay interest on the issuance of bills to withdraw currency, and the interest on foreign exchange reserves forms the central bank's income, and when the former is greater than the latter, the cost of the central bank holding foreign exchange reserves will rise accordingly. Third, the official foreign exchange reserves belong to short-term, low-yield foreign investment, while private foreign assets are mainly medium- and long-term, high-yield investment, so the proportion of the former is too high will reduce the income level of China's foreign financial assets.

In the face of economic risks and challenges, foreign exchange reserves are a good guarantee and play a role as a stabilizer of economic growth.

1. As a means of valuation and payment for international settlement, foreign exchange transfers international purchasing power, makes it possible to circulate currencies between countries, and facilitates international settlement. International economic exchanges in various forms have formed international creditor's rights and debts, and the settlement of international creditor's rights and debts requires certain means of payment.

2. The emergence of foreign exchange has promoted the development of international society. The use of foreign exchange for international settlement has the characteristics of security, convenience, cost saving and time saving, so it accelerates the development process of international development and expands the international scope.

3. Foreign exchange can regulate the flow of funds in the world, adjust the imbalance between the supply and demand of funds, and accelerate the process of world economic integration. The use of various foreign exchange bills in the international market has expanded the scope of international financing, and at the same time, with the continuous strengthening of the openness of various countries.

The increase or decrease of foreign exchange reserves is determined by the political situation of the international and domestic economies.

Although our foreign exchange reserves have declined recently, our country has strong financial strength and a lot of domestic funds, and there are many reasons, mainly in the following aspects:

1. After decades of reform and opening up, China has laid a solid economic foundation and a huge economy, which has cultivated a strong source of tax revenue for the country.

2. China has always adhered to the policy of balancing revenue and expenditure, with a slight surplus, living within the limits of income, investing money on the blade, feeding the economy, and further promoting economic development, thereby consolidating and strengthening tax sources.

3. China has adopted a relatively centralized financial system, which can concentrate financial resources to do great things. Because most of the funds are concentrated in the hands of the state, it can both ensure democracy and ensure the implementation of major decisions.

Foreign exchange reserves are special funds for regulating and controlling the exchange rate market, and foreign exchange reserves have fallen by one trillion yuan, and there is no conflict with domestic funds.

Foreign exchange reserves are funds earmarked for regulating the exchange rate market.

In June 2020, China published a national balance sheet. China's total assets have exceeded 1,300 trillion yuan. According to the research of the Jiao Tang Academy of Social Sciences, these early sail assets include buildings, machinery and equipment, as well as infrastructure such as railways, highways, bridges, bank deposits, valuable**, etc.

Among them, the total assets of the household sector are 358 trillion yuan, accounting for 30% of the total assets; The total assets of the non-financial enterprise sector were 340 trillion yuan, accounting for 28% of the total assets; The total assets of the financial institution sector were 367 trillion yuan, accounting for 30% of the total assets; **The total assets of the department are 146 trillion yuan, accounting for 12% of the total assets.

In addition, according to the research results of the Chinese Academy of Social Sciences, China's total debt has reached an astonishing 773 trillion yuan. From this, it can be calculated that China's net assets are 437 trillion yuan. Among them, the total assets of the household sector were 358 trillion yuan, the liabilities (mainly bank loans) were 39 trillion yuan, and the net assets were 319 trillion yuan.

If China's total assets, total liabilities, and net assets are converted into US dollars (calculated at the current interest rate), these three figures are 192 trillion US dollars, 114 trillion US dollars, and trillion US dollars.