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In China, the foreign direct investment from year earlier in its first half raised 45.6%; growth inflows of cash might add fuel to inflation in the fastest growing major economy in the world.
Direct Foreign Investment of China In China, the foreign direct investment from year earlier in its first half raised 45.6%; growth inflows of cash might add fuel to inflation in the fastest growing major economy in the world. Today the ministry of commerce on it Web site said that, the expenditures by the overseas companies have increased to $52.4 billion. China is trying to control the stalk inflows of tentative capital from the investors, concerned by the increasing yen and interest rates at a decade high. According to a professor of finance at Peking University, for the first five month this year, the money inflows have reached more than $200 billion. In Beijing, an analyst Shi Lei of the Bank of China Ltd said that the “Since the beginning of 2007, direct investment in foreign currency has been one of the major channels for hot money.'' Speculators can find a way to get out of government rules.'' Last month a report from the central bank said that besides the danger of stoke inflation that reached to its high on February 12 this year, burning money puts the country at danger if potential for currency gains overturn. Against dollar, the yen has gained 6.9 percent this year and 21% and since 2005, lasting exchange rates were scrapped. The one-year lending rate is 7.47 percent, and the deposit rate is 4.14 percent. Surplus Trade Last month $21.4 billion was pumped into the economy, this cash was added by direct foreign. According to the newest official data, china the world’s biggest foreign-exchange reserves surged 40% to a record of $1.68 trillion in the month of March. The increase in the month June might be announced as early as today. The chief economist of state information center Zhu Baoliang in Beijing said that ``China would stay a beautiful destination of funds, as the yen continues to appreciate and the economy of other countries outperform. To stop the investors from circumventing capital controls government is adding measures. Last week the State Administration of Foreign Exchange said that, from July 14 it would check exporters' foreign-exchange settlement to stop facade dealings that let hot money in. China is also drafting system to manage cross-border payments for services, with the same aim, according to an official at the regulator, who would not be identified. |
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