Ye Tan: Where Are The Foreign Reserves Declining?

In October 23rd, the State Administration of Foreign Exchange released data showing that in September, the foreign exchange settlement and sale of foreign exchange decreased for second consecutive months. The deficit increased from 5 billion 100 million yuan last month to 100 billion 600 million yuan, which was about 20 times more than the 900 million yuan deficit in August.

At the end of the three quarter, foreign exchange reserves decreased by about 100 billion US dollars compared with the end of the two quarter.

According to the data released by the safe, there was a "double deficit" between the banks and their own foreign exchange in September.

The State Administration of foreign exchange's explanation for the difference between the US $100 billion is: don't panic, it's just book change.

The explanation is mainly due to the exchange rate conversion caused by the strong exchange rate of the US dollar in the international market.

In the three quarter of this year, the US dollar index increased by 7.7%. The appreciation of the US dollar would lead to a decrease in the amount of non US dollar assets when converted into US dollars.

It is estimated that the proportion of US dollar assets in China's foreign exchange reserves is about 2/3, and the euro and other currencies are about 1 trillion and 330 billion US dollars. If we refer to the three quarter dollar index appreciation of 7.7%, that is equivalent to 7.15% of other currencies depreciation, or about 95 billion US dollars, which basically coincides with the reduction of US $100 billion in foreign exchange reserves.

Zhang Tingbin wrote in the first financial daily that he could not deny the fact that the international hot money was outflowing.

In 2014 6~9, China's trade surplus was 31 billion 600 million, 47 billion 300 million, 49 billion 830 million and 31 billion US dollars, totaling 159 billion 730 million US dollars; FDI increased 14 billion 420 million, 7 billion 810 million, 7 billion 200 million and 9 billion 10 million US dollars respectively, totaling US $38 billion 440 million.

Their conversion to foreign exchange should be about +1.22 trillion yuan, but the actual amount is -804 billion yuan.

In recent years, China's economic data is not satisfactory, investment cooling, corporate earnings growth decline, and market expectations for weakening RMB appreciation are all factors of hot money outflow.

There is no need to overstate the impact of the hot money outflow on China's economy. At present, the price of RMB remains at a high level, and the strong phase will continue. China's foreign exchange reserves are sufficient.

In order to reduce the holding of huge US dollars

The central bank has repeatedly lost weight on foreign exchange reserves for the fluctuation of the RMB exchange rate.

At present, the decline in foreign exchange and sale of foreign exchange is the result of the dark encouragement, in order to reduce the pressure of the currency water level.

Foreign exchange reserves are not as good as possible. Huge foreign exchange reserves have also created enormous pressure to appreciate the renminbi.

When Prime Minister Li Keqiang visited Africa in May this year, he said frankly, "more

Reserve is already a big burden for us, because it will become the basic currency of our country, which will affect inflation ". Inflation, asset price bubbles, and the government's macroeconomic regulation and control are being pushed into the corner.

In recent years, it has become an established strategy to encourage enterprises to invest overseas, and the internationalization of RMB has been prepared for the purpose of lifting the mandatory foreign exchange settlement and sale.

According to the data released by the safe in October 16th, in August, the foreign exchange balance of the bank was 5 billion 100 million yuan, and the domestic bank's foreign currency receipts and payments amounted to 75 billion 200 million yuan. The short-term capital may flow out of China through capital account, which is also consistent with the government's direction of encouraging foreign investment.

Another rumor is that the central bank has pferred the US $100 billion to CIC, or to make second CIC, and to make some foreign exchange reserves through CIC or the second CIC.

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There is little possibility of throwing in external storage injection.

CIC needs the central bank and the Ministry of finance to make strategic decisions at the highest level.

It will take a lot of money to set up the second China investment, and the difficulty is not in the last round of the establishment of CIC. There is no need to fight.

CIC's book performance looks good at the moment, and it gives a fairly good answer: in 2013, the net profit rate of offshore business reached 9.33% in 2013; at the end of 2012, the annual return of the company's overseas investment portfolio reached 10.60%, and the cumulative annualized rate of return was 5.02% since its inception.

Fundamentally speaking, the way to diversify risks and improve efficiency is to "sink in the people and remit businesses in Tibet".

At present, the decline in foreign exchange reserves is partly due to the accumulation of foreign exchange in the private sector.