- CNTV English - CCTV News

Trade surplus, capital flow hint at hot money

09-21-2010 09:47 BJT

Watch Video

Play Video

Experts say the sharp rise of capital flowing into China suggests the inflow of hot money is returning to the country.

The "Position for Forex Purchases" is a term used to describe the amount of money used to purchase foreign capital.

Figures from the central bank shows August's monthly increased volume of these funds exceeded 200 billion yuan, for the second time since this April.

A drop in this spending is usually linked with China's trade surplus, capital utilization or hot money inflow conditions. But analysts say the current rise is mainly caused by the inflow of hot money.

China's property tightening measures rolled out in April, and a weakening expectation to the yuan's appreciation from June to July caused an outflow of the international capital.

Experts say short-term international capital is now coming back to China. The uncertain global economic outlook has made emerging economies, such as India and China, more attractive investment destinations. And expectations of the yuan's appreciation and China's looser currency policy may drive more hot money into China's market.

Analysts forecast the capital outflow from European countries could be short-lived, possibly no more than two quarters. Experts are warning that means China now faces a tough situation in dealing with the hot money inflow.

Editor:Xiong Qu |Source: CNTV.CN

Hot Videos view more

The celebrations are still continuing as the victorious coach, Joachim Loew, has been honored for his achievement in his hometown of Freiburg.
Germany coach Loew honored in hometown of Freiburg

Chinese men´s national team continued its preparations for next year´s Asian Cup, as they managed a one-all draw against visitors Jordan during a football friendly in Harbin, the capital city of Northeast China´s Heilongjiang Province.
China held to 1-1 draw by Jordan

The defending world champs came into the contest with a perfect 6-and-oh record, but they would be in for a tough first half before opening things up in the second.
USA beat Slovenia 119-76 in quarter-finals

Hot Stories more

UK authorities believe killer of James Foley is a British national

Across the UK the hunt is on for James Foley’s killer, who authorities believe is a British national. As Richard Bestic reports from London, Prime Minister David Cameron cut short his summer break to lead his government’s response.

Israeli war jets renews Gaza strike as truce talks stalled

Three Palestinians were killed and 40 others wounded in the intensive Israeli war jets´ airstrikes on the Gaza city on Tuesday night, shortly before an end of a 24-hour ceasefire in the Gaza Strip,

Missouri police arrest dozens after violent night

As the protests in the town of Ferguson, Missouri turned violent with police facing ´heavy gunfire´ from some ´criminal elements´, cops fired tear gas, stun grenades and arrested 31 demonstrators on Monday night.

Picture in news more

More Video News

Choose TV Program