As the size of China's forex reserves expands, the government established a $200-billion sovereign wealth fund in September 2007 by the issuance of 1.5-trillion-yuan special treasury bonds in exchange for foreign currencies from the central bank. This shows even the central bank, which oversees forex reserves, has no right to randomly allocate the funds, let alone to distribute them as "free gifts." When business people and ordinary citizens come for foreign exchange transactions, how would they be paid if the central bank runs out of cash because its foreign currency holdings have been distributed to the people to boost consumption?

Yu Fenghui (www.china.com.cn): The volume of forex reserves is a key criterion to measure one country's strength of international payments. Previous experience shows that the financial market is volatile enough. If the situation changes, foreign investment, venture capital and hot money will soon flow back to home countries, leading to a sharp decrease in forex reserves of the capital outflow country. China needs its forex reserves in store to get through this devastating crisis. If we hastily hand the money out, the country's overall economic strength, especially that of international settlements, will be enormously weakened.

A cause of discontent among netizens is that some state-owned enterprises and government bodies often make wrong investment decisions, which result in huge losses of public funds. It is better to give public funds to the people than let them be wasted by irresponsible officials, they argue. As embezzlement scandals are occasionally exposed, taxpayers are increasingly aware of the fact that they are not fully granted the right to know. Therefore, the government must intensify efforts to restore public confidence by eliminating embezzlements of state assets and curbing unreasonable bonus payments for top managers.

Qing Yi (Guangzhou Daily): Based on theories of classical macroeconomics, the government functions to encourage its citizens to engage in labor activities and then participate in wealth distribution. The distribution of forex reserves, however, involves no labor activities and thus creates no wealth.

The handout of $1 trillion in forex reserves to the people means to double last year's Chinese household income that remained under 10,000 yuan ($1,430) per capita. If there are no additional commodities and/or services of the same value available in the marketplace, the increase of cash in circulation may trigger inflation or excessive savings.

Fu Keyou (Chengdu Business Daily): As the global economic downturn continues, the mammoth forex reserves are essential to stabilize China's economy. Foreign currencies are totally different from shopping vouchers given by the government, since the former cannot be spent at the domestic market, let alone depreciating treasury U.S. bonds and contracted dollar-denominated assets.

Zhang, who is a thorough liberal economist, has long advocated marketization as the core values. Free market economists believe that every possible means could be used to achieve marketization, though they sometimes do not have clear ideas of the operational procedures and foundations of the market.

As an emerging economy, China in effect needs to be more market-oriented, and that process should not be interrupted by the current financial turbulence in the global market. If the biggest problem facing the U.S. economy is "excessive marketization," the Chinese economy is challenged by both insufficient marketization and underdeveloped public services. When the market plays its due role in allocating resources to optimize social efficiency, the government always serves as the market watchdog to regulate trading behaviors and ensure an order of fair play, rather than simply handing public assets out.

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