Discussion on Primary of Deepening Foreign Exchange System Reform from Fast Increasing of Foreign Exchange Reserve in China

China's foreign exchange reserve has increased quickly since 1994. The adverse impact on economic has become more and more obviously. This paper analyzes the influence of fast increasing foreign exchange reserve, and the disadvantage of the regulation on foreign exchange system. It stresses the most important reason of such disadvantages resulting from the obligatory foreign exchange selling system. The conclusion is that china must deepen reform of the regulation on the foreign exchange system.