当前位置:首页 > Information > Chinese News

China takes measures to tackle flow of hot money

Source:   Time:

After the Fed's latest measures, hot money is back in the spotlight yet again. And China's taken control measures to ensure the flow of funds into the country is regulated.

The State Administration of Foreign Exchange says it's uncovered 10 cases of illegal private bank operations. The Administration also found 197 cases on the illegal use of foreign exchange, with funds around 7.3 billion U.S. dollars.

Experts say China is a prime target for overseas hot money inflows, especially after the central bank raised interest rates, and the second round of quantitative easing was implemented by the U.S.

Lian Ping, Economist of Bank of Communications said "It will cause domestic liquidity to rise, and place pressure on commodity prices. At the same time, this will push the appreciation of the RMB. The central bank should adjust its policy on the market and control the inflow of capital. The hot money will cause certain pressure on the independence of the RMB exchange policy."

China's central bank governor Zhou Xiaochuan says the inflow of hot money is mainly aimed at finding speculation opportunities. He says China will try its best to prevent speculation, but complete prevention is impossible. He places emphasis on balancing the macro-economy, to avoid negative influences on the domestic economy.

Experts also say China could learn from the experiences of Brazil and the EU, by charging a finance transaction tax, and postponing the staying period of hot money. Such measures will raise the cost of capital and the speculation time period.

[Relative Articles]

Copyright Reserved 2010 © South-East Asia & South Asia Infoport  | Filing Number:ICP 09005773
Technical Support:China Basalt Software Technology Co., Ltd.