China's foreign exchange reserve reached US$1.0663 trillion at
the end of 2006, announced the People's Bank of China on
Monday.
The figure represents a 30.22 percent rise over 2005. It was the
first time that China's foreign exchange reserve were confirmed to
have exceeded US$1?trillion, according to the central
bank.
The bank's statistics show that the figure broke the
US$1trillion mark at the end of October 2006.
China reported a fresh increase of US$247.3 billion of foreign
exchange reserve in 2006, standing US$38.4 billion higher than the
relevant growth in 2005.
China became the world's largest foreign currency depositor in
the first half of 2006. Figures from the State Administration of
Foreign Exchange show that China's foreign exchange reserve stayed
below US$1 billion before 1979.
The huge reserve reflects China's economic achievements since
sweeping reforms began in the late 1970s, but observers worry that
an excessive and fast-growing reserve of foreign exchange will
endanger currency stability and liquidity.
The further rapid growth of the reserve will continue to fuel
speculation on the appreciation of the Renminbi (RMB), said Tan
Yaling, a research fellow with the China International Economic
Relations Association, under the central bank.
Being the product of foreign trade revenue and foreign
investment, China's huge reserve has been a source of worry for
international critics, who argue that the RMB should be revalued
and that the undervalued yuan gives Chinese products an unfair
price advantage in international markets and hurts manufacturers
from other countries.
Its vast foreign exchange reserve means China has economic power
that can influence the world, said Zhao Xijun, a professor with the
Renmin University of China.
Zhang Yansheng, an official with the National Development and
Reform Commission, said that China should increase imports and
improve the quality of foreign investment, while maintaining a
reasonable growth of exports and use of foreign investment.
(Xinhua News Agency January 16, 2007)