China is seeking more channels to use its massive foreign
exchange reserves, which are expected to continue growing after it
quintupled in the past five years, said some financial experts
before the annual session of the country's top political advisory
body that opens Saturday afternoon.
Contrary to its past policies, the country is implementing
stricter regulation on incoming foreign exchanges and loosening
rigid controls on outgoing reserves, said Huang Zemin, a member of
the National Committee of the Chinese People's Political
Consultative Conference (CPPCC) and head of the International
Finance Institute of East China Normal University.
The foreign exchange reserves reached US$1.066 trillion at the
end of 2006, up from 212.2 billion dollars at the end of 2001,
according to the People's Bank of China.
The advisor said the country is seeking more channels to ease
the pressure generated by rising foreign reserves, allowing
businesses to keep a larger share of their foreign income and
encouraging overseas financial investment in the form of qualified
domestic institutional investors (QDII).
The State Administration of Foreign Exchange (SAFE) granted 15
banks overseas investment quotas totaling US$13.4 billion in 2006.
Meanwhile, 15 insurance companies were granted overseas investment
quotas of US$5.17 billion and one fund management company was given
a quota of US$500 million.
The Chinese government should make use of its foreign reserves
and play a more active role in world economy, said CPPCC National
Committee member Guo Guoqing, a professor with the Renmin
University of China based in Beijing.
Guo suggested China use part of its trade surplus to import
technologies and resources.
More than 2,200 CPPCC National Committee members are expected to
gather for the Fifth Session of the 10th CPPCC National Committee
that will last 12 days.
(Xinhua News Agency March 3, 2007)