SHANGHAI: China attracted a total of US$48.7 billion (S$68 billion) of 'hot money' last month, the largest amount in eight months, according to China International Capital.
A surge in asset prices, and speculation that the central bank will end the yuan's peg against the dollar, have prompted investors to pump money into China. 'Hot money' is a term used to describe flows of short-term, speculative capital.
An official at the State Administration of Foreign Exchange, the nation's currency regulator, said last Saturday that Beijing will 'appropriately control' capital inflows and continue with a clampdown on illegal transfers of funds from abroad.
The National Development and Reform Commission said last Thursday that residential and commercial real estate prices in 70 cities climbed 7.8 per cent last month, the fastest pace in 18 months. The Shanghai Composite Index of shares jumped 80 per cent last year.
China's foreign exchange reserves, the world's largest, stood at a record US$2.4 trillion at the end of last year.
BLOOMBERG
Source: Straits Times, 19 Jan 2010.
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