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Chinanews, Hong Kong, Dec. 22 – 2007 marks the first year for Chinese merchants to go out to make investment at overseas market. Some far-sighted international investors1 now have begun to discuss the long-term impacts brought about by such move, the Hong Kong-based Economic Information reported.
Some industrial insiders predict that Chinese merchants investment at overseas market will be on a par2 with that of Japan in ten years’ time and the flowing trend of Chinese investment has attracted great attention from the international market. The latest information shows that at present, the total foreign exchange reserve in the Chinese mainland has reached 1.43 trillion US dollars, doubling the import volume of the first three quarters of this year, also four times the Chinese foreign debt(which stands at 320 billion US dollars). If the 1.43 trillion US dollars of foreign exchange reserve could be shared among the 1.3 billion Chinese population, then every Chinese could have 1,100 US dollars of the foreign exchange reserve. Some Western economists3 propose that a country’s foreign exchange reserve should be equal to its 3-6 months import volume. Based on this criterion, China should have a foreign exchange reserve of at most 360 billion US dollars. As the US economy, especially the US dollar, plays a big role in world economy, the sustained US dollar depreciation4 has now become a state will of the US. However, the loss of US dollar value is not a good thing to China, either. As the US dollar value continues to drop, the value of China's foreign exchange reserves also shrinks dramatically. For many years, US treasury5 bonds have formed a main part of China's foreign investment constitution. Since the beginning of this year, however, China has cut down its US treasury bonds investment by 5%.
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