China's foreign exchange reserve had reached 1.53 trillion U.S.
dollars by the end of 2007, up 43.3 percent from 2006, the People's
Bank of China announced Friday.
A total of 461.9 billion U.S. dollars was added to the country's
forex reserve in 2007, said the central bank.
In December alone, the forex reserve rose by 31.3 billion U.S.
dollars.
China's forex reserve maintained a sharp growth in 2007,
reaching 1.2 trillion U.S. dollars by the end of March, 1.33
trillion U.S. dollars by the end of June, and 1.43 trillion U.S.
dollars by the end of September.
China's soaring trade surplus is the major factor contributing
to the forex reserve boom.
Data newly released by the General Administration of Customs
show that China's trade surplus surged to a record 262.2 billion
U.S. dollars in 2007, representing a 47.7 percent growth over a
year earlier.
The huge forex reserve is considered the main reason for excess
liquidity in China, as the central bank has to spend quantities of
basic money to purchase foreign exchange, thus aggravating the
problem of surplus fluidity.
By the end of 2007, the M2 -- a broad measure of money supply,
which indicates the monetary demand of the whole country and
possible inflation -- grew by 16.72 percent from a year ago to
40.34 trillion yuan.
The growth rate is 0.22 percentage points lower than that by the
end of 2006, but still higher than the target growth of 16 percent
set by the central bank at the beginning of 2007.
A total amount of 330.3 billion yuan was poured into the market
in 2007, 26.2 billion yuan more than 2006.
On the other hand, continuous growth of the forex reserve has in
fact increased the pressure on appreciation of the Chinese
currency, which in turn has exerted greater pressure on value
preservation of China's forex reserve.
The value of the Chinese RMB against the U.S. dollar has
appreciated by more than six percent in 2007. The central parity
rate of the RMB was 7.2672 to the U.S dollar Friday.
In a move to make better use of the country's huge forex
reserve, China established the China Investment Corporate Ltd.
(CIC), the country's state forex investment company, in 2007.
The state-owned investment company will invest in overseas
financial markets.
The registered capital of 200 billion U.S. dollars of the CIC
all comes from the forex reserve of the country, which have been
poured into the company so far.
According to data released by the central bank, RMB loans
increased by 3.63 trillion yuan in 2007, 1.14 times of the growth
in 2006.
Tightening credit growth has become a major target of the
government's macro-control policies in 2007.
Against a series of monetary tightening measures including
interest rate hike and deposit reserve requirement ratio rise,
growth of RMB loans began to slow down in the last two months of
2007.
China's central bank raised the deposit reserve requirement
ratio ten times and the benchmark interest rate six times in
2007.
According to the central bank, RMB loans increased by 48.5
billion yuan in December alone, 172 billion yuan less than the same
month of 2006.
Data showed that household savings, savings mainly from Chinese
residents, rose by 1.13 trillion yuan in 2007, only 54 percent of
the increase of 2006.
China's booming mainland A-share market is the major factor
distracting people from saving.
The RMB deposit balance was 38.94 trillion yuan at the end of
2007, up 16.07 from a year earlier, said the central bank.
(Xinhua News Agency January 12, 2008)
