There are two inaccuracies to the common belief that hot money flows into China through international trade: "hot money" and "trade channels". First, China’s domestic financial market is still at ...There are two inaccuracies to the common belief that hot money flows into China through international trade: "hot money" and "trade channels". First, China’s domestic financial market is still at the initial stage of development, and foreign exchange control has put barriers to entry and exit of overseas capital. Strictly speaking, the short-term highly liquid "hot money" does not exist in China, and is referred to as long-term speculative capital in this paper. Second, such capital does not come from trade alone. International trade is only part of corporate business operations, and a more reasonable and complete description is that "overseas capital flows into China through foreign-funded enterprises". Through analysis of the inflow channels, this paper estimates that the stock of long-term speculative capital between 1999 and 2006 stands at almost US$ 400 billion. The year 2006 saw an increase of US$ 98.09 billion, of which US$ 35.4 billion was formed through international trade, which equals to roughly 20% of trade surplus that year. But this does not mean that 20% of trade surplus is long-term speculative capital.展开更多
文摘There are two inaccuracies to the common belief that hot money flows into China through international trade: "hot money" and "trade channels". First, China’s domestic financial market is still at the initial stage of development, and foreign exchange control has put barriers to entry and exit of overseas capital. Strictly speaking, the short-term highly liquid "hot money" does not exist in China, and is referred to as long-term speculative capital in this paper. Second, such capital does not come from trade alone. International trade is only part of corporate business operations, and a more reasonable and complete description is that "overseas capital flows into China through foreign-funded enterprises". Through analysis of the inflow channels, this paper estimates that the stock of long-term speculative capital between 1999 and 2006 stands at almost US$ 400 billion. The year 2006 saw an increase of US$ 98.09 billion, of which US$ 35.4 billion was formed through international trade, which equals to roughly 20% of trade surplus that year. But this does not mean that 20% of trade surplus is long-term speculative capital.
