Economy

China pledges to crack down on hot money inflows

(Xinhua)
Updated: 2010-08-04 18:51

BEIJING - China's foreign exchange regulator Wednesday pledged to continue efforts to manage illegal capital inflows in the second half of the year.

In a statement on its website, the State Administration of Foreign Exchange (SAFE) said it had investigated up to 3.5 million cases of international trade transactions, involving a total of $440 billion, during its hot money monitoring campaign, which began in February.

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The statement said it had identified 197 cases of illegal capital inflow, but it gave no exact sum for the cases.

SAFE said earlier last month that its investigations had found 190 cases, involving $7.35 billion, of hot money inflows.

Capital flows into and out of China for purposes other than import and export payments are strictly controlled by SAFE, which manages the country's $2.45 trillion in foreign exchange reserves.

The statement also said it would introduce new foreign exchange instruments to meet domestic market demand and support China's currency reforms.

China's central bank announced on June 19 that it would further the reform of the formation mechanism of the yuan exchange rate to improve its flexibility.

The hot money campaign was launched amid concerns that speculators were betting on an appreciation of the Chinese currency and rising asset prices.