Vice-Premier Zeng Peiyan gave new credence to this policy suggestion when addressing the 25th session of 10th Standing Committee of the National People's Congress on Tuesday.

It was reported that the top economic official told leaders of the national legislature that the government intends to take advantage of the country's more than US$1 trillion in foreign reserves to increase reserves of strategic resources.

The benefits of such attempts are huge and obvious.

On the one hand, by diversifying into building up a reserve system of key resources, the country found a stopgap solution to its rapidly expanding foreign exchange reserves.

China's foreign exchange reserves more than doubled in the past three years to exceed US$1 trillion. The fast rise in the forex has exerted great pressure on the central bank by pumping excessive liquidity into the domestic market. Internationally, it also incurred criticism from some developed countries as evidence that the country needs to revalue its currency.

Chinese policy-makers have made clear their determination to reduce external imbalances. The purchase of key resources with foreign exchange reserves will surely help ease, if not fix, the problem of too many forex reserves.

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