A Study on the Foreign Reserve of

China and related issues

 Fan Desheng
School of International Business
Beijing Foreign Studies University
E-mail:fandesheng@bfsu.edu.cn
 Main Contents
• Economics as a social science

• About the Foreign Reserve of China

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 Economics as a social science
• Q1: Are you happy? what is the happiness?

• Q2:How can you live a satisfying life?

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 Happiness
• The benefits derived from
consuming are called utility .
• Understanding the happiness:

Happines = Utility
Wants
• Cannot compare the utilities of
different people.
• Cannot say "You are happier than I am"
• Can say "You would be willing to pay
more than I am for some good.“
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 Hierarchy of
Needs
Need Product Promotional appeal

Self-actualization Golf Clubs “ Time is to enjoy”

Esteem Luxury car “Be in control of the Road”

Social Pendant “Show her you care”

Safety Tires “Bounces off hazards”

Physiological Breakfast cereal “The natural energy source”

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 how to improve the happiness

 Happiness =utility /wants  5 ways to improve the

happiness “
 Defined ：
 1、
H =W
U

 2、

= − 3、

h u w
h u w  4、
 5、

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 Case study: measure your happiness

• How happy are you? Sure, you may think you know, but this little test will help you keep
score. The satisfaction with Life Scale was devised in 1980 by University of Illinois
psychologist Edward Diener, a founding father of happiness research. Since then the scale
has been used by researcher around the world.
• Reading the following five statements. Then use a 1-to-7 scale to rate your level of
agreement.

1 2 3 4 5 6 7
• Not at all true moderately true absolutely true
• ① In most ways my life is close to my ideal.
• ② The conditions of my life are excellent.
• ③ I am satisfied with my life.
• ④ So far I have gotten the important things I want in life.
• ⑤ If I could live my life over, I would change almost nothing.
05/06/09
• Tot al s cor e__ __ __ 8
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• Scoring:
• •31 to 35: you are extremely satisfied with your life
• •26 to 30: very satisfied
• •21 to 25: slightly satisfied
• •20 is the neutral point
• •15 to 10: slightly dissatisfied
• •10 to 14: dissatisfied
• •5 to 9: extremely dissatisfied

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 Eight Steps Toward a More Satisfying Life

• Want to lift your level of happiness? Here are some

practical suggestions from University of California
psychologist Sonja Lyubomirsky, based on research
findings by her and others. Satisfaction ( at least a
temporary boost) guaranteed

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• 1. Count your blessings. One way to do
this is with a “gratitude journal” in which
you write down three to five things for
which you are thankful---from the
mundane( your peonies are in bloom) to
the magnificent( a child’s first steps). Do
this once a week, say, on Sunday night.
Keep it fresh by varying your entries as
much as possible.
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• 2. Practice acts of kindness. These should be both
random( let that harried mom go ahead of you in the
checkout line) and systematic (bring Sunday supper to
an elderly neighbor). Being kind to others, whether
friends or strangers, triggers a cascade of positive
effects---it makes you feel generous and capable, gives
you a greater sense of connection with others and wins
you smiles, approval and reciprocated kindness----all
happiness boosters.

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 Eight Steps Toward a More Satisfying Life( cont.)

• 3. Savor life’s joys. Pay close attention to

momentary pleasure and wonders. Focus on the
sweetness of a ripe strawberry or the warmth
of the sun when you step out from the shade.
Some psychologists suggest taking “mental
photographs” of pleasurable moments to review
in less happy times.

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• 4. Thank a mentor. If there’s someone whom
you owe a debt of gratitude for guiding you at
one of life’s crossroads, don’t wait to express
your appreciation---in detail and , if possible ,in
person.

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• 5.Learn to forgive. Let go of anger and
resentment by writing a letter of forgiveness to
a person who has hurt or wronged you. Inability
to forgive is associated with persistent
rumination or dwelling on revenge, while
forgiving bolsters positive feeling about your
past and gives you peace of mind.

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 Eight Steps Toward a More Satisfying Life( cont.)
• 6. Invest time and energy in friends and
family. Where you live, how much money you
make, your job title and even your health have
surprisingly small effects on your satisfaction
with life. The biggest factor appears to be strong
personal relationships.

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• 7. Take care of your body. Getting plenty of
sleep, exercising, stretching, smiling and
laughing can all enhance your mood in the
short term. Practiced regularly, they can help
make your daily life more satisfying.

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• 8. Develop strategies for coping with stress
and hardships. There is no avoiding hard
times. Religious faith has been shown to help
people cope, but so do the secular beliefs
enshrined in axioms like “This too small pass”
and “That which doesn’t kill me make me
stronger.” The trick is that you have to believe
them.
• Material resources: 《 Times 》 February 28.2005

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Eighteen Ways to Be Glad
1.Goal
2.Smiles
3.Participation
4 .Helper
5.Childishness
6.Intercommunication
7.Humor
8.calmness
9.Mercy
10.Fellows
11.Cooperation
12.Family-enjoyment
13.Self-confidence
14. Sympathy
15.Loose
16 、 Affusion
17. Visit a friend

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18. No Moneygrubber
Why? no moneygrubber

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 Money is not everything

It can buy you a house but not a home.

It can buy you a bed but not sleep.

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It can buy you a clock but not time.

It can buy you books but not knowledge.

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It can buy you blood but not life.

It can buy you sex but not love.

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It can buy you a position but not respect.

It can buy you medicine but not health.

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Money may not be the root of all evil,
But it often brings us anguish and
regrets.

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Now I would like to tell you how to solve the
problem, my dear friends.
And I hope you will forward the solution to other
friends of yours.

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Give all your money to me. Let me
suffer from the anguish for you.

Right now, Ok? :-)

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 Further reading
• Research study finds that happily marriage can
make one more happy ,but reading as follows:

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I married Miss Right.

I just didn’t know her first

name was ALWAYS!!!

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 Marriage is a 3-ring circus:

Engagement Ring

Wedding Ring

SuffeRing

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 The last fight was my fault.
My wife asked, “What’s on the
TV?”
I said: ...

“DUST!”

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In the beginning, God created earth and rested. Then God created
man and rested. Then God created woman.

Since then, neither God nor man has rested!

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Do you know the punishment for bigamy?

Two MOTHER-IN-LAWS!
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Why do men die before their wives?

They want to!

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 A beggar walked up to a well dressed woman shopping on
Rodeo Drive and said: “I haven’t eaten anything in four days”.
She looked at him and said? ...

I wish I had your willpower!

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Young son: “Dad, I heard that in some parts of Africa
a man doesn’t know his wife until he marries her?”

Dad: “That happens in every country, son.”

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A man inserted an ad in the classified: “WIFE WANTED”.
The next day he received a hundred letters.
They all said the same thing:

“You can have mine!”

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 Now I am unhappy , why?

• A Study on the Foreign Reserve of

China

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yea r For ei gn Re ser ve Annu al gr owt h ra te%
（ 0.1 b ill io n ）
199 4 516 .2 14 3.5
199 5 735 .97 42 .57
199 6 1050 .4 9 42 .74
199 7 139 8.9 33 .17
199 8 1449 .5 9 3.62
199 9 1546 .7 5 6.7
200 0 1655 .7 4 7.05
200 1 2121 .6 5 28 .14
200 2 2864 .0 7 34 .99
200 3 4032 .5 1 40.8
200 4 6099 .3 2 51 .25
200 5 8188 .7 2 34 .26
200 6 106 63. 44 30 .22
200 7 152 82. 49 43 .32
200 8 1946 0. 3 27 .34
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 The m ont hl y d at a Fo rei gn Re se rve Mon thly Mo nth ly
inc reas
e
in 200 8 （ 0.1 b ill io n ） （ 0.1 gr owt h rat e
bill ion
）
　 　 　
1 15898.1 615.51 4.0 3
2 16471.34 573.24 3.61
3 16821.77 350.43 2.13
4 17566.55 744.78 4.43
5 17969.61 403.06 2.29
6 18088.28 118.67 0.66
7 18451.64 363.36 2.01
8 18841.53 389.89 2.11
9 19055.85 214.32 1.14
10 18796.88 -258.97 -1.4
11 18847.17 50.29 0.27
12 19460.3 613.13 3.25

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Graph : monthly growth rate of FR
2008

5.00
图1：2008年外汇储备月份增长率（%）
4.00

3.00

2.00

1.00

0.00
1 2 3 4 5 6 7 8 9 10 11 12
-1.00

-2.00

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 Reasons why the FR increases
quickly
∆F = ( LTC + STC ) + ( X − M )
• resouces:
• current account: trade surplus
• capital and financial account: A. FDI
• B. hot money
• George Solos: financial crocodile
• Southeast Asian Financial Crisis

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Effect on the Economy of Huge FR
• Inflation
• Monetary policy independence

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 Why the u.s. pressure on china to
revalue Reminbi
• Trade : TOT (terms of trade)
• Finance: speculation
• Example:

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• Thank you for your listening!

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