China steps up efforts against speculative capital inflows

China is intensifying monitoring of short-term capital inflows in a bid to curb speculative money rushing in from abroad, according to a statement on the website of the State Administration of Foreign Exchange.

It will also detect and penalize fraudulent export activities, which often disguise speculative capital inflows, according to the statement.

Speculative money often flows into China for investment in Chinese equity markets and in real estate projects, threatening the nation's macro economic control, the statement said.

Forex inspectors are required to investigate products and service trades, external debts and real estate and tourism sectors.

Meanwhile, inspections of banking services have been stepped up, as commercial banks are major institutions dealing with forex settlement in China.

The statement said the investigation could help efforts to identify the main channels and forms through which speculative capital flows in and to detect loopholes in government policies, which need to be amended.

Last year, the administration penalized 19 Chinese commercial banks and 10 foreign-funded banks which violated forex control rules, according to the statement.

Source: Xinhua