China Has Yet To Find Massive Inflow Of Hot Money.

Country foreign exchange Li Chao, deputy director of the Bureau, said in September 1st that he was attending the ministerial level financial cooperation forum of the first China Asia Europe Expo in Urumqi. Despite the obvious increase in net inflow of cross-border capital this year, there has been no sign of massive inflow of "hot money" in regulation.

Entering this year, "hot money" has once again become the key word for Chinese regulators to be vigilant. China's capital and financial surplus reached US $179 billion 300 million in the first half of 2011.

In this regard, Li Chao admits that in the current RMB appreciation Under the circumstance of obvious interest rate spread between China and abroad, foreign exchange funds flowing into China "not all have real trade and investment background": some funds are "hot money" motivated by short-term arbitrage, and some of them have real trade and investment background, while arbitrage is also conducted through currency selection.

"From the point of view of foreign exchange and settlement, the pressure of China's current foreign exchange capital net inflow is still relatively large," Li Chao said. These arbitrage activities objectively increased the inflow of foreign exchange capital and the real economy, which easily triggered potential risks in the financial sector, but also caused some "trouble".

Li Chao said that in response to this situation, China's foreign exchange administration has stepped up its crackdown. hot money Strength: first, we should comprehensively use economic and legal means to curb the inflow of abnormal external capital and increase the arbitrage cost of speculative capital; two, we should make good use of monitoring analysis and inspection methods, increase the notification punishment for the principal part of the breach, strengthen the detection and analysis of cross-border capital flows, improve the assessment of bank compliance operations, and maintain a good foreign exchange market order. At the same time, China has also actively promoted trade and investment facilitation, and has cleared and cancelled the measures of compulsory foreign exchange settlement through clearing up the existing laws and regulations trade system. "China's forced foreign exchange sale system is no longer in existence," Li Chao said.