By the end of June 2024, China's foreign exchange reserves reached 3.2224 trillion US dollars, ranking first in the world.

This is the foundation we have accumulated over decades of opening up to the outside world.

If the United States were to replicate its tactics against Russia onto China, would these over 3 trillion US dollars be at risk?

What should we do?

Prior to 2022, most people would have scoffed at this topic.

Foreign exchange reserves are a country's important strategic assets; who would dare to tamper with them?

However, starting from 2022, the series of sanctions imposed by Western countries, particularly the United States, on Russia have continuously refreshed and even overturned the global perception of overseas assets.

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They have gone to great lengths to freeze Russia's foreign exchange reserves, seize its overseas assets, and are trying to find legal grounds for their actions, attempting to claim these assets for themselves.

The harsh reality has made us realize that, theoretically speaking, China's over 3 trillion US dollars in foreign exchange reserves also face the risk of being frozen and seized.

After all, the vast majority of foreign exchange reserves are stored abroad, and if they wish to do so, there are always ways to manipulate them, almost impossible to avoid.

Foreign exchange reserves, as the name suggests, are reserve assets primarily in foreign currencies.

In terms of composition, they include foreign currency cash, deposits in foreign banks, overseas assets, U.S. Treasury bonds, European bonds, Japanese bonds, and gold, among others.

The reserves that are kept domestically are usually foreign currency cash and a portion of gold reserves.

However, foreign currencies do not circulate domestically and have a very low usage rate, so the amount of foreign currency cash held is not large.

The reserve of gold is substantial, but there are costs associated with transportation and storage.

At present, gold is not a currency and is not used for trade settlements; its value is reflected in investment and preservation, and it cannot meet the country's needs for foreign currency.

Apart from foreign currency cash and gold, other foreign exchange reserves are essentially not stored domestically but in the issuing countries of the foreign currencies.

In other words, under normal circumstances, foreign exchange reserves are just a set of numbers.

The ownership of these assets belongs to China, but the currency itself has not flowed into China and is still represented abroad in the form of assets or claims.

China's 3.2 trillion foreign exchange reserves are primarily in U.S. dollars and euros, supplemented by Japanese yen, British pounds, and other currencies.

The display in U.S. dollars is for the sake of uniformity.

The U.S. dollar is the most active currency in global payments and is considered hard currency worldwide.

The European Union and the United States are China's main trading partners, and the primary destinations for our foreign trade exports.

We export goods to Europe and the United States and naturally earn U.S. dollars or euros in return.

Historical and current factors have determined that the currency composition of foreign exchange reserves is mainly in U.S. dollars and euros, and the storage in developed European and American countries is not a random choice.

The United States leads the way in "breaking the rules," not adhering to international business order, and has joined allies to freeze about 300 billion U.S. dollars of Russia's foreign exchange reserves.

China's foreign exchange reserves are more than five times that of Russia and are primarily stored abroad.

How can we make the United States think twice and not act rashly?

First, foreign exchange reserves cannot be reduced to zero; they can only be optimized to the greatest extent possible.

In the wave of globalization, there is no country in the world that is isolated and self-sufficient.

As long as there is trade with other countries, a certain scale of foreign exchange reserves is necessary.

Those countries that have exhausted their foreign exchange reserves are all on the brink of economic collapse.

Since foreign exchange reserves cannot be replaced and emptied, what we need is a rational allocation of reserve assets, diversified layout, and appropriate selection of higher return varieties on the basis of ensuring safety and liquidity, increasing our say in the field of bulk commodities, not putting all eggs in one basket, diversifying risks, and getting rid of dependence on U.S. Treasury bonds.

Second, we must adhere to high-quality opening up to the outside world, create a high-quality business environment, and attract more foreign investment to invest and set up factories in China.

In the first half of 2024, China's actual use of foreign capital amounted to 498.91 billion yuan, with nearly 270,000 new foreign-funded enterprises established nationwide.

From 2013 to 2022, China's scale of attracting foreign investment has steadily increased for ten consecutive years, exceeding 1.2 trillion yuan in 2022.

China's door to the outside world is getting wider and wider, highly integrated with the global economy, complementing the advantages of developed European and American countries, and has long formed a complex situation where "you have me, and I have you" economically.

A single cut will cause pain for both sides.

The best choice for the United States is to follow the rules.

In the worst-case scenario, China can retaliate equally, making them cautious and not daring to act rashly.

Third, we must accelerate the modernization of national defense construction and take the path of a strong country with a strong military.

History has proven time and time again that poverty and backwardness will be beaten and bullied.

Without the protection of a strong military force, a wealthy country with a weak military is like a child carrying gold through a busy market, becoming a "hot cake" in the eyes of others, and can only be bullied.

China is the world's second-largest economy with a good momentum for development.

As long as we unswervingly move forward on the path of development, China will become stronger and stronger.

In the face of absolute strength, all ghosts and monsters will have nowhere to hide, and all tricks will have nowhere to play.

Mutual respect, peaceful coexistence, and win-win cooperation are the true ways!