China on guard against hot money

15:03, December 14, 2010      

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State Administration of Foreign Exchange (SAFE) stressed the need to strengthen supervision of cross-border capital flows on Dec. 13. It also advocates actively responding to and fighting against hot money and other unusual cross-border capital flows as well as guarding economic and financial interests of national security.

To safeguard national economic and financial security, from the beginning in February 2010, China has been cracking down on hot money. SAFE is organizing special actions in some cities that have a large volume of foreign exchange business.

As of the end of October this year, a total of 197 cases of foreign exchange violations have been verified, and the total amount of money involved reached 7.34 billion U.S. dollars.

SAFE recently issued a document on the further regulation of trade, foreign direct investment, return investment, overseas listing and other sources of cross-border funds flows. These guidelines aim to strengthen banks' short-term external debt management and obligations to examine the authenticity in the foreign exchange business. This will further aid the crackdown on illegal capital inflows and prevent financial risks brought by cross-border "hot money" inflows.

By Huang Beibei, People's Daily Online
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