Group 1: Definition of Foreign Exchange Reserves - Foreign exchange reserves refer to the foreign currency assets held by a country's central bank or monetary authority, used for intervening in the foreign exchange market, maintaining economic and financial security, paying international debts, and stabilizing the domestic currency value [3] Group 2: Composition of Foreign Exchange Reserves - Major components of foreign exchange reserves include foreign currencies, foreign currency securities, foreign payment instruments, and other foreign assets such as gold reserves [4][5] - The dollar is a significant part of many countries' reserves, with estimates indicating that 46%-52% of China's foreign exchange reserves are in dollar assets [5] - As of June 2025, China's gold reserves amounted to 73.9 million ounces (approximately 2,298.55 tons), with a balance increase of $900 million to $24.29 billion, representing 7.32% of the total foreign exchange reserves [5] Group 3: Functions of Foreign Exchange Reserves - Foreign exchange reserves help adjust the balance of international payments, ensuring a country can continue foreign trade even during trade deficits [5] - They stabilize the domestic currency exchange rate by allowing central banks to buy or sell their currency in the foreign exchange market [5] - Adequate reserves enhance a country's creditworthiness and ability to repay debts, which is crucial for maintaining a favorable credit rating [5] - Reserves act as a buffer against sudden international financial risks, helping to stabilize domestic financial markets during crises [5] - They support national economic development by facilitating the import of advanced technologies and materials necessary for growth [5] Group 4: China's Foreign Exchange Reserves Situation - China's foreign exchange reserves have grown significantly since the late 20th century, reaching $3.3174 trillion by June 2025, marking a recovery after six months of decline [7] - The structure of China's reserves is heavily weighted towards dollar assets, influenced by the dollar's dominance in international trade and finance [7] - China is actively optimizing its reserve structure by reducing the dollar's proportion and increasing holdings in other currencies like the euro [7]