"I am not against the country's increase in foreign exchange reserves, but it cannot increase for the sake of increasing. Foreign exchange reserves must have a clear goal. How much is appropriate to increase, it is not enough to spend. But is there any way to deal with it if it increases? The foreign exchange reserves have always been the largest US dollar. Now it's okay to say that a hundred billion US dollars is increased to a trillion US dollars in the future. If we increase the reserves to a trillion US dollars in the future, we will not become the biggest creditors of Americans. Is it beneficial to us and Americans?"

"At the current foreign exchange growth rate, the reserves exceed one trillion US dollars, which is more than ten years later, domestic financial controls are implemented, and foreign exchange is increasing day by day but not effectively managed, which is easy to be criticized by domestic and foreign countries. The rules and systems of foreign exchange management and use are transparent and open, which is the decisive pillar of stabilizing the financial market. In 1996, my country implemented the convertible RMB under current account. In the future, the goal of the RMB is to form a complete exchange system and become a circulating hard currency internationally. How much foreign exchange reserves are needed for my country to be backed up? The convertible process of RMB must be steadily and gradually, but is there a roadmap that will make investors at home and abroad feel confident that they can't take one step at a time and cram the moment they take." Yang Xing raised many questions, and made both prime ministers think seriously.

After the founding of the People's Republic of China, China's family foundation was weak, and Western countries long blocked my country. After the 1960s, China offended the Soviet Union, the big brother of the socialist camp. Many technical resources were imported from foreign countries and cost a lot of foreign exchange. Therefore, foreign exchange controls were adopted for a long time, and all foreign exchange circulated among the people were concentrated in the hands of the country. Although many foreign exchange controls were liberalized after the reform and opening up, the basic principles have not changed.

In China, foreign exchange earned by foreign trade companies cannot be kept, but must be handed over to the State Administration of Foreign Exchange. The Administration of Foreign Exchange then exchanges foreign exchange for RMB and hands it over to foreign trade companies for use according to a certain foreign exchange price. When the enterprise needs to use foreign exchange, it will exchange RMB at the State Administration of Foreign Exchange for the required foreign currency type. During this period, the exchange procedures for RMB and foreign exchange are complicated, and the approval process is very long.

Many foreign capital and companies that want to go abroad complain about this. These foreign trade companies have to set up special foreign exchange management departments to be responsible for this matter. Many companies simply go to foreign tax avoidance sites to establish subsidiaries, intercept the money earned abroad and continue to invest and use, causing a large amount of national funds to flow out. However, this method has both advantages and disadvantages. The advantage is that it naturally plays a firewall for various hot money that flows internationally. During the Asian financial crisis, international speculators did not have the idea of ​​the Chinese RMB, but strict foreign exchange controls discouraged them, so the RMB exchange rate has been stable during this storm. This is also the confidence that the Chinese government announced that the RMB would not depreciate.

However, this closed and conservative method is not a way out. The development trend of world finance is the convertibility and circulating currency. Even if an Asian financial crisis occurs, Southeast Asian countries, South Korea, Japan and other countries have not closed their doors to implement monetary controls. China's current WTO negotiations are also clearly announced that after joining the WTO, it will gradually relax the control in the financial field and gradually lift foreign exchange controls. Realizing the convertibility of the RMB, pushing the RMB to the world, and even becoming one of the international reserve currencies is also a goal set by the country long ago. After all, as the country's strength gradually grows, whether the RMB can circulate freely and become a hard currency in international transactions is a standard for measuring a country's national strength. The RMB truly becomes the currency of the people of the world, which also marks China's regaining its ranking in the world in the past.

"It took twenty years for our current foreign exchange reserves to exceed 100 billion US dollars in the early stage of reform, but the Xingdou Research Institute under my command made a prediction. If we follow the current import and export speed, plus the tariffs on most commodities after joining the WTO, we are afraid that the speed will be much faster. Conservatively, our foreign exchange reserves will likely exceed the trillion US dollars in the first ten years of the next century, surpassing Japan to become the world's largest foreign exchange reserve country. Time is very tight!" Yang Xing's prediction surprised both Wen Cheng. According to Yang Xing's meaning, this means that the import and export volume will increase by 100 billion US dollars in the future. He is really confident! Yang Xing looked surprised and thought that this was something I deliberately said less. The actual situation will not increase by 1 trillion US dollars but 3 trillion US dollars!

"Now the institutions of the national foreign exchange reserves are all confidential, but researchers from the Stardou Research Institute have analyzed that about 70% of these reserves are assets denominated in US dollars, about 20% are German marks and yen, and the rest are gold and Imf Special Drawing Rights (SDR). "After saying that, Yang Xing saw Cheng Canghai's eyes twitching, obviously his guess was very close to the facts.

Wen Rengui sighed and said, "You have a group of amazing subordinates! It doesn't matter to tell you, in fact, the US dollar accounts for a larger proportion, close to 80%, and most of them are bought in the long-term US Treasury bonds." Yang Xing slapped: "Yes! Suppose we have a trillion foreign exchange reserves in ten years, and the US dollar accounts for 800 billion, becoming the number one creditor of Americans. Do you think Americans will remain indifferent to this, and the domestic people will not poke our backbone because of this?"

The two prime ministers were speechless. Obviously, the question raised by Yang Xing was very sharp. As the helmsman of a country's economy, they must face this problem. With the subtle relationship between China and the United States, if China really becomes the number one creditor of the United States in ten years, it will definitely not be as simple as the usual debt relationship. They can predict the public pressure on this at home and abroad. However, they are still a little admiring for Yang Xing's optimism in the country's economic judgment in the next ten years. Now is the critical negotiation period for joining the WTO. Many domestic economists are worried about whether the domestic economic field will be completely submerged by foreign goods after joining the WTO, and whether the national competitiveness will be greatly damaged. For example, Yang Xing and his subordinates are very confident in the future Chinese economy.

Yang Xing looked at their expressions, of course he didn't expect his family to obey both prime ministers, but it was a good sign to attract their attention. Cheng Canghai asked him: "You just talked with Vice Premier Wen about changing some US dollar reserves to euro reserves, which is the reason?" Yang Xing nodded and told him some of his thoughts about foreign exchange reserves. "I just said that the euro has just started, which is a great opportunity to resolve the US dollar dilemma. Foreign exchange management cannot only look at the interest rate gains and losses for a while, but requires

You have to observe the long-term international economic situation and cooperate with the domestic economic cycle to make a judgment. After Europe merges into the European Union, the overall strength and market size have surpassed the United States. This newly established monetary union has great potential, and a country's currency is always backed by the economic strength of a country. As the only economy that can compete with the United States, I am very optimistic about its currency. Gradually change the foreign exchange reserve structure that relies solely on the US dollar settlement and increase the euro settlement business. I think I will start now."

"In addition, we must consider accelerating the pace of internationalization of the RMB. No matter how good the money is, it is not as good as the money of our own. In external settlement, we will gradually establish a mechanism to adopt RMB settlement. To prevent accidents, we can consider establishing an offshore settlement center for RMB in Hong Kong for pilot projects. If the effect is good, we can further issue RMB-denominated bonds, stocks and other RMB financial products. Don't let go of it because of choking. Just seeing the impact of the Asian financial crisis on currency, you will hide back on the old path of currency control. There will always be risks in reform, and the reform of the RMB must be advanced."

"Secondly, we should also pay attention to physical reserves in foreign exchange reserves, such as precious metals. Capitalism has its own rules, the economy is moving forward in a wave-shaped manner, with peaks and troughs. When encountering economic downturns, the value of precious metals such as gold and silver as safe-haven products often rebound. Now the international price of gold is sluggish, only about 300 US dollars per ounce. We are a major gold producer, but gold reserves rank very low in the international market. Many Western countries are selling their gold reserves at low prices. The internationalization of the RMB must require sufficient physical capital to ensure it. During this financial crisis, the people of Thailand and South Korea spontaneously donated gold to the country to stabilize their own currencies. Can we take this opportunity to establish a long-term precious metal trading mechanism to increase their proportion in foreign exchange reserves?"

"And with the rapid growth of foreign exchange reserves, how to use them rationally and safely needs to be put on the agenda. I will talk about several of the uses. For example, whether we can establish several national sovereign funds to invest in the experience of Hong Kong and Singapore. In this process, we should not be afraid of temporary investment gains and losses, and we should persist for a long time. This can not only train our own financial investment talents, but also make the best use of the investment income and use the investment income for social insurance and national construction. The focus of investment can be on overseas mineral resources, high-tech and other fields that are urgently needed in China, and it can also support domestic enterprises to go abroad to explore."

"The second is to establish a special foreign exchange fund to buy and sell according to foreign exchange changes in the international market. This business is risky and profitable. The key is to let us master more weapons of the RMB exchange rate. When the RMB is freely converted, we will definitely encounter similar international speculator attacks in the Asian financial crisis. With experience, taking the initiative like Hong Kong is the best way to use the national strength to restore financial order!"

Yang Xing talked for a long time, combining his many experiences in the financial wars over the past few years and the essence of various economic theories in his previous life’s debate on the huge foreign exchange reserves, which really made Cheng Canghai and Wen Rengui’s ideas open up. Although his words were very different from the mainstream opinions of the domestic economy, every word revealed his deep thoughts and insights on the Chinese economy. After listening to him, Cheng Canghai said to him: "It's really awesome. The Politburo will study the Standing Committee in the past few days and listen to the new research results of experts from all walks of life on cultural economy and the legal system. I have decided to let you be the main speaker, and you will tell the other Politburo members about what they have told us today!"
Chapter completed!