The government expressed satisfaction at the returns earned on the country’s forex reserves. The China Securities Journal quoted State Administration of Foreign Exchange‘s Deputy Director Wei Benhua as saying that the government is contemplating expanding the range of investments of its forex reserves. At present, the major portion of forex reserves is invested in bonds issued by governments, international financial institutions and companies.
However, the government does not have any plans to set up a special unit to manage the world’s largest foreign exchange reserves. China’s foreign exchange reserves reached US$853.7 billion as of the end of February. Benhua said that the government looks into the safety, liquidity and profitability aspects, while investing forex reserves and not short-term profits. Last year, only a small portion of US$208.9 billion increase in forex reserves came from speculative inflows. The newspaper also reported that about US$100 billion had come from trade surplus, US$20 billion from remittances from overseas Chinese and earnings from overseas projects and around US$60 billion came from foreign investment.