Closer Look: What to Do with US$ 3.9 Tln in Forex Reserves

(Beijing) – China's foreign exchange reserves rose to US$ 3.948 trillion at the end of the first quarter. The figure in 1978 was US$ 167 million, and in November 1996 it surpassed US$ 100 billion for the first time. The change has been amazing.

There have been many thoughts about how we can make use of the forex reserve, ranging from buying assets abroad to using it as leverage in diplomatic talks. What needs emphasizing is that the reserve is not a free buffet. It corresponds to the central bank's debt in yuan and costs dearly to maintain.