The Wall Street Journal translates a portion of comments from the State Administration of Foreign Exchange. These comments, made by the organization’s deputy director, give some insight to China’s approaches to domestic and global economy issues.
On China’s investment strategy during the crisis:
China has nearly two trillion dollars in foreign exchange reserves. These foreign exchange reserves are invested in the international financial markets, which of course is a severe challenge. Over the years, China’s foreign-exchange reserve management has always been based on the principles of safety, liquidity, and profitability, and a diversified investment strategy. We are always sober and cautious, and put risk management first. We have strengthened internal oversight and regulatory compliance, and strictly guarded against operational risks.Since the sub-prime crisis evolved into the international financial crisis in September last year, we have executed the central authorities’ plans to cope with the international financial crisis and launched the emergency response mechanism. We have closely followed developments, made timely adjustments to risk management, taken decisive and forward-looking measures to evaluate and remove risks, and strengthened internal controls and compliance.
After several months of hard work, by the end of 2008, we had preserved the safety of our country’s foreign-exchange reserve assets, while at the same time preparing sufficient liquidity to respond to the crisis, and also earning a certain profit.
