Wu Xiaoling, vice governor of the People's Bank of China. (newsphoto file)

BEIJING, April 5 -- China is not deliberately pursuing expansion of its foreign exchange reserves or any particular level of reserves, a vice head of the central bank said in comments published on Wednesday.

    China's forex reserves amounted to US$853.6 billion at the end of February, replacing Japan for the first time as the biggest forex reserve holder in the world. Japan's forex reserves stood at $850.1 billion at the end of February.

    Wu Xiaoling, vice governor of the People's Bank of China or the central bank, said an excessive trade surplus, the source of much of China's reserves, was not desirable and needed to be addressed through policies.

    "Deficit in balance of payment is not good, but an excessive amount of surplus is not favorable, either," she said, adding adjustments in economic structure are needed to deal with the surplus issue.

    Any rise or drop in a country's foreign exchange reserves ultimately reflects its macro-economic performance and its international balance of payment, and there is no scientific way to measure what is the most appropriate amount of forex reserves, she said.

    Officials have previously disavowed any desire for larger reserves or an enormous trade surplus.

    The central bank was looking to increase access for individuals and corporations to the foreign exchange trade to make it less dominated by the government, she said.

    Measures to increase the holdings of foreign exchange by individuals and corporations include: decontrolling enterprises in opening foreign exchange accounts, raising the ceilings on individuals to purchase foreign currency under the current account, and easing restrictions on enterprises to make investments overseas and their use of foreign exchange under the capital account, Wu said.

    (Source: China Daily)