Investment secures wealth for security

Wealth security is an important component of state security. In China, the wealth of the State has increased faster than that of residents since the 1990s thanks to tax, financial and State-owned enterprise reforms. The fiscal revenue of the Chinese government was 8.31 trillion yuan ($1.32 trillion) last year, and foreign exchange reserves touched $3 trillion at the end the first quarter of 2011. Besides, the combined total assets of banking and financial agencies at home and abroad were more than 100 trillion yuan, and the total assets of 122 State-owned enterprises reached 24.3 trillion yuan by the first quarter of this year.

The huge state wealth, however, is a double-edged sword. If it is not managed properly, the public will regard it as an exploitation of their labors, which could threaten social stability. In reality, though, a considerable part of the wealth is not accumulated assets, but potential debt for the future, including dominant liabilities such as foreign exchange reserves, invisible liabilities such as pensions paid by the State to retired employees, as well as overdue liabilities for rural people and infrastructure construction in western China accompanied by price rises.

Experience shows that investment in the global market is an important way to guarantee state wealth security. The value of wealth is comparative, especially today when token money and virtual economy are becoming stronger.