Econometric Model and Empirical Analysis on China's Foreign Exchange Reserves Scale

In recent years,China's foreign exchange reserves rise sharply and remain high.As of the end of December,2008,the balance of foreign exchange reserves was USD1,946.03 billion,which was nearly 2 times higher than that in October,2006 when the foreign exchange reserves broke one trillion mark.The vast coffers of foreign exchange reserves are helpful to safeguard China's economic security to certain extent,as well as demonstrate the comprehensive national strength of China.However,the continuous and excessive increase of foreign exchange reserves has brought some adverse effects on the Chinese economy.This Article is intended to make regression analysis of the factors that affect the scale of China's foreign exchange reserves by utilizing EVIEWS statistical software,so as to identify the main causes that result in the excessive increase of foreign exchange reserves and the adverse impact on the Chinese economy,and finally propose several solution measures.