Plundering China's Reserves
It looks like a treasure trove ripe for plundering. With China's foreign-exchange reserves now close to the trillion dollar mark, calls to spend the money are coming fast and furious.
China's premier, Wen Jiabao, suggested using a chunk of the reserves to buy high-tech equipment for Chinese companies. Vice President Zeng Qinghong added raw materials to the shopping list. Chinese and foreign commentators proposed spending more on everything from medical care to rural education to tackling environmental degradation. A grandiose proposal to establish a Chinese Peace Corps was floated, too.
But the argument that these projects would make better use of China's reserves than simply purchasing U.S. Treasuries misses the point. China's reserves are not a trouvaille which can be used for policy objectives -- however laudable. In addition, the nature of China's exchange-rate regime makes it impossible to plough the foreign reserves back into local currency spending.
China's $1 trillion central bank reserves can't be spent freely, any more than assets held by any other big bank, such as the $1.6 trillion of assets on Citigroup's balance sheet. Instead, China's cash pile represents dollars bought by the central bank from Chinese companies, which receive the greenbacks in exchange for payment for exports or foreign investments.
Although China moved to a slightly more flexible exchange-rate regime last year, the central bank still restricts the yuan's trading band to a narrow 0.3% each day up or down against the dollar. That policy forces the central bank to sell or, more frequently, buy as many dollars as necessary to keep the yuan within that range. To fund its dollar purchases -- currently running at $20 billion a month -- the central bank issues bonds or prints more money, although too much of the latter can be inflationary. The foreign-exchange reserves, then, represent no more than the asset side of a balance sheet, against which the central bank holds liabilities.
The central bank can buy assets with its dollars, such as when it purchases U.S. Treasury bonds, or when it took equity stakes in the large Chinese banks last year. That amounts to investing the funds that it holds, in the same way as Citigroup or any other big financial institution might do. But spending the dollars on policy objectives is another matter entirely. Whether the reserves are used to fund rural education or the establishment of a Peace Corps, the result is the same: the central bank's balance sheet is depleted because it doesn't receive an equivalent asset in exchange, while its liabilities remain the same. Even if the funds are used to purchase high-tech equipment or raw materials, as Chinese leaders have suggested, the central bank's assets still fall as soon as those purchases are delivered to their end users. And, once again, there is no equivalent reduction in the liabilities incurred to purchase the dollars. In each case, the effect is the same as if the central bank or some other branch of the Chinese government simply borrowed money, and then spent it.
Using foreign currency for domestic spending simply doesn't work under China's current exchange-rate regime, because the dollars always end up back at the People's Bank of China. For example, suppose the government decided to transfer $100 of reserves to pay for nurses' salaries in a hospital in Gansu, one of China's poorest provinces. The hospital would then have to sell those dollars to a local commercial bank to obtain yuan to pay their workers' salaries. But the local bank could only raise the yuan that it gives the hospital by selling the $100 on one of China's handful of foreign-currency markets, where the central bank buys up any excess dollars to keep the exchange-rate stable.
So, the central bank would receive its $100 back again, and the size of China's foreign-exchange reserves would remain exactly the same. The only difference is that the central bank would either have to sell bonds or print more money to buy back the $100 which it gave away. As a result, either the government's net indebtedness would increase or there would be an excess -- and inflationary -- amount of yuan in circulation.
Things would be different if China liberalized its capital account and allowed the yuan to float freely. The People's Bank of China would no longer have to buy all the excess dollars and could let the exchange rate move until it found a buyer elsewhere. But as long as Beijing maintains its current exchange-rate regime, the central bank has no control over the size of its reserves.
Any government program, however laudable, must be funded, and there are only three ways the government can do so. It can raise domestic taxes or charge fees. That option includes printing more money, which creates a different kind of tax by fueling inflation. It can sell off or privatize assets owned by the government. Or it can borrow money domestically (in China, external borrowing is automatically transformed by the central bank into domestic borrowing because when the dollars are brought back into China, they must be purchased and funded by central bank borrowing).
Discussions of how China can ameliorate social conditions must specify how central or local governments can fund that social spending. But plundering the country's vast reserves to pay for domestic programs is simply not an option.
Mr. Pettis is a finance professor at Peking University.
瓜分中国的外汇储备
这看上去就像一笔正待瓜分的无主宝藏。随着中国的外汇储备目前接近1万亿美元大关，社会上要求中国花掉这笔钱的呼声正汹涌而来。
中国总理温家宝建议用其中部分外汇储备为中国企业购买高技术装备。国家副主席曾庆红则建议除此之外再将原材料列入采购清单。中外评论人士则建议，将外汇储备更多用于医疗卫生、农村教育以及环境保护等社会事业。甚至还有人提出了创建中国和平队这一宏伟计划。
但声称将中国外汇储备用于上述用途比单纯购买美国国债要划算的说法其实都没抓住要害。中国的外汇储备并非一笔可被慷慨用于政策性项目的意外横财。此外，中国的现行汇率制度也决定了，将外汇储备兑换成本币再支出是不可行的。
中国央行手中的1万亿美元外汇储备是不能随意支出的，这一储备与其他大银行所管理的资产没有什么两样，比如说花旗集团(Citigroup)帐上的那1.6万亿美元资产就不能随便被动用。事实上，中国的外汇储备是中国央行从中国企业手中购买的，后者手中的外汇来源于出口收入和所获外商投资。
虽然中国去年略微提高了一些其汇率制度的灵活性，但中国央行仍将美元兑人民币汇率的日升降幅度控制在0.3%以内。这一政策迫使中国央行须卖出（目前更经常的是买入）一定数量的美元以便将美元兑人民币汇率的波动幅度控制在上述区间内。为了筹措购买美元的资金──中国央行目前每月的美元购买额为200亿美元左右──央行必须发行债券或多印钞票，而票子印得太多会引发通货膨胀。因此，外汇储备不过是兑成了外币的央行负债而已。
中国央行可以用手中的美元购买资产，比如说美国国债，或者像去年那样换取大型国有银行的股份。这与花旗集团以及其他大型金融机构将所持资产用于投资的方式也没有什么不同。但央行将美元储备用于政策性项目则是性质完全不同的另一回事了。无论是将这笔钱用于农村教育还是创建和平队，其结果都是一样的：央行资产负债表上的资产减少了，因为央行无法回笼等额的资产，而资产负债表上的负债却依旧是那么多。即使像中国领导人建议的那样用外汇储备购买高科技设备和原材料，央行资产负债表上的资产仍然会像上述情况下一样迅速减少。当然，资产负债表上用于购买美元的负债同样不会减少。无论是哪种情况，其结果实际上都相当于央行或中国政府的其他部门举债消费。
在中国目前的汇率制度下将外汇储备用于国内支出也是行不通的，因为花出去的美元最终总是会回到央行手中。例如，假设政府准备用100美元的外汇储备为中国最贫困省份之一甘肃的某家医院支付护士工资。那么这家医院必须向当地一家商业银行卖出这些美元，以换取支付护士工资的人民币。而那家当地银行则必须在中国屈指可数的几个外汇市场上卖出那100美元才能补上支付给那家医院的人民币，可是为了维持人民币汇率的稳定，中国各外汇市场上的多余美元最终都是被央行悉数买进的。
所以，中国央行又回笼了那100美元，而中国外汇储备的规模依然未变。要说有什么变化，那就是央行为了回笼它花出去的这100美元，就必须要么发行债券要么多印人民币。其结果是，不是政府的净负债额增多了就是向市场投放的人民币出现了过量，而后者则将导致通货膨胀。
如果中国放开对资本项目的控制，允许人民币汇率自由浮动，那情况就不同了。中国央行将不再需要购买市场上的全部多余美元，它可以听任美元兑人民币汇率自由波动，到多余的美元完全被市场消化时波动自然停止。可只要中国政府继续维持现行的汇率制度，中国央行就无法控制其外汇储备的规模。
任何由政府出资的项目，无论其初衷多么美好，都是要政府掏钱的，而政府筹资的途径只有三条。它可以通过加税或出台某项收费政策来筹钱。具体做法包括多印钞票，这实际上是变相加税，其结果是加大了通货膨胀压力。它还可以将国有财产出售或实施私有化。第三种方式就是在国内借钱。（在中国，所借外债会由央行自动地转化为内债，因为借回来的外币必须向央行兑换成人民币，而央行支付的人民币则是它在国内举借的。）
讨论中国如何能提高社会福利这一问题时，必须考虑中央或地方政府用于社会项目支出的财力有多大。但将中国巨大的外汇储备分一块用于国内项目支出显然行不通。
（编者按：本文作者迈克尔?佩蒂斯(Michael Pettis)是北京大学的金融学教授。）
