ABSTRACTA Study on the Optimal Foreign Exchange Reserves of ChinaHE, YIDepartment ofInternational TradeGraduate School ofWoosuk University Foreign exchange reserves as a measure of a country's external indicators are important to the economy, not only to ensure that the international trade payment, also to protect the country from external shocks, the stable exchange rate and improve their confidence of local and foreign investors, the size of its size has been subject to many economists concerned. China's foreign exchange reserves rise year after year, China's macroeconomic management is facing new challenges. How to define a reasonable range of reserves in formulating sound macroeconomic management policies play an important role. This paper summarizes the results of Chinese and foreign scholars on the basis of China's economic realities, in-depth study of China's foreign exchange reserves, China's foreign exchange reserves established a reasonable range of model and raised a number of policy recommendations and views to the relevant government departments to provide valuable reference.