Additional to the motivations described in the previous post, there are more for the Chinese ruling elites to insist their crazily stupid foreign currency policies.
First of all, they see this inflowing foreign money as easy money to earn by simply dictating the exchange rate and controlling the prices of Chinese labor, land, natural environment and resources.
Secondarily, the financial nightmare of Eastern Asia in 1997 could hardly be forgotten by any Eastern Asian national leader, especially the Chinese leaders who are so corrupt, inept, and therefore lacking self-confidence. Thus, the Chinese leaders believe that more foreign currency reserve means a safer financial system in China. Further along this line of thought, Chinese government always welcomes the inflowing foreign money but restrains the outflowing foreign money strictly. They believe when whatever financial storm comes, as long as they can control the outflowing of foreign money, they will not be devastated too much. They believe they could use the foreign investors and their wealth in China as a hostage to counter-fight whatever external pressures or forces.
Dr. Paul Krugman on The New York Times
Living Economies Forum, the Online Home of David Korten
Tales of Two Nations 
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