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China says speculative money rising rapidly
Beijing (AFP) Jul 25, 2006 The markets are betting the Chinese currency may rise in value, reflected in a rapid increase in funds entering the country for short-term speculative gain, the government said Tuesday. The inflow of such funds, dubbed "hot money," hit 12.5 billion dollars in May, up from 5.3 billion dollars in April, 4.5 billion dollars in March and one billion dollars in February, the National Bureau of Statistics said. "Since February this year hot money inflows reflecting speculation that the yuan will appreciate have staged a comeback," the bureau said in a report on its website. The bureau said it did not have a scientific and well-defined measure of "hot money." Instead the bureau assumed it to be the part of the monthly increase in foreign exchange reserves that could not be accounted for either by direct investment or the trade surplus. According to some economists, "hot money" is more destructive than investments meant for the long term, such as foreign funding of new companies. "Hot money" achieved notoriety in East Asia in the late 1990s, when it was blamed for the serial collapse of the region's economies. In China's case, recent "hot money" is supposedly encouraged by hopes that Beijing will eventually give in to global pressure for its currency to rise in value -- as well as being boosted by a booming property market. Investment from Hong Kong and other sources outside the Chinese mainland has poured into the real estate sector, the state-run Xinhua news agency said. Xinhua said speculators were "apparently hoping to profit from rising prices and an anticipated rise in the yuan, which would push up the value of mainland assets in foreign currency terms." Community Email This Article Comment On This Article Related Links China News from SinoDaily.com
Typhoon hits China, over 500,000 evacuated
Beijing (AFP) Jul 25, 2006 Typhoon Kaemi struck the southeast coast of China on Tuesday, sparking the evacuation of over 500,000 people in an area still reeling from a tropical storm that claimed over 600 lives. |
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