A deputy governor of the People's Bank of China has warned of rising difficulties in managing its growing foreign-exchange reserves, while also vowing to strengthen monitoring of cross-border capital flows.

A deputy governor of the People's Bank of China has warned of rising difficulties in managing its growing foreign-exchange reserves, while also vowing to strengthen monitoring of cross-border capital flows, the South China Morning Post reported.

The remarks by Yi Gang, also head of the State Administration of Foreign Exchange, demonstrate some of the challenges facing Mainland authorities as they seek to deepen foreign-exchange management reforms in the new year.

"Although China has achieved relatively good returns on the investment and operation of foreign reserves through hard work, the investment environment is generally not optimistic," Yi wrote in an article published in the Communist Party's Qiushi magazine and posted on SAFE's website.

"It's become more and more difficult for China to invest and operate with the foreign reserves as well as maintain and increase the reserves' value because of the quantitative easing monetary policies implemented in the developed economies,” he said.

The mainland has accumulated $3.66 trillion worth of foreign reserves, the world's largest, partly because the PBOC has retained capital controls and only allowed the yuan to float under a managed system.