China reports US$35.5b of hot money inflow in 2010
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China's State Administration of Foreign Exchange (SAFE) announced Thursday that 35.5 billion U.S. dollars of hot money flowed into the country in 2010, accounting for 7.6 percent of the increase in its foreign reserves for that year.
The SAFE said hot money inflow was small over the past decade with an annual average amount of about 25 billion U.S. dollars, accounting for 9 percent of the increase in the nation's foreign reserves per annum.
Capital inflows from overseas were in accordance with the real economy's fundamentals, despite small amounts of illegal hot money inflow.
There have been no large-scale capital inflows to established financial institutions, the SAFE added.
"The constant capital inflow from overseas in the past decade can be mainly attributed to the stable and relatively rapid growth of China's economy," the report said.
The SAFE said maintaining the country's economic stability, improving the financial system and macro-economic controls were essential to controlling cross-border capital flow.
In the future, the SAFE will continue to closely supervise cross-border capital flow and prevent risks arising from cross-border capital flow, the report said.
The SAFE said it would also strive to develop the foreign exchange market and diversify foreign exchange instruments to ward off risks.
On Wednesday, the SAFE announced that the domestic trading of yuan options against other currencies would begin April 1.
