Hot money has become less scary.

Tang Fuoyong Another more than 10 years of the concept of "hot money" in China began to become clear.　　17th, the State administration of foreign exchange balance of payments analysis panel released the "2010 China Cross-border Capital Flow Monitoring Report" for the first time answered China's hot money problem, not only the way it is measured, but also roughly estimated the net hot money flows since 1994. For the Chinese people, has been the mysterious "hot money" future will no longer mysterious, and will not talk about "hot money" and color changed, and even can be foreseen, will become a regular data published.　　In this sense, it is indeed a kind of progress. In the past, in people's impression, always think "hot money" is a kind of will bring unrest, for "hot money" always fear more than like.　　Through the report of the State administration of foreign exchange, it is clear that "hot money" is not as scary as it might think. The crux of the problem is that people are aware of the way hot money is measured and the approximate data of "hot money" in China in the past more than 10 years.　　Although "hot money" in theory is generally defined as the international short-term speculative arbitrage funds, but in practice it is difficult to accurately grasp the real motives and duration of international capital flows, so there is no strict definition of "hot money" scale and standards. In the report published by the board, there are two main international approaches to the analysis: direct measurement, capital and financial projects outside the direct investment, and total error and omission projects (also known as net capital flows in the form of indirect investment). The second is indirect measurement method or residual method, using the increment of foreign exchange reserve minus the trade surplus and the net inflow of direct investment.　　But the former cover narrow, and the latter blow face too large, may overestimate the "hot money" scale, and foreign exchange reserves also exist in valuation factors. In the previous few years, domestic folk guess "hot money" is usually the amount of the second method, but this method has repeatedly been shunned by the board or explained. In this calculation method, China borrowed the indirect measurement method, combined with China's reality, and adjusted the reserve increment and elimination project. Including the import and export surplus, direct investment net inflow, overseas investment income, domestic enterprises listed overseas listing financing repatriation and so on.　　In the calculation, the difference is the net amount of "hot money" when the above four items are deducted from the increment of the foreign exchange reserves formed by the transaction. In recent years, because of the proliferation of China's foreign exchange reserves, coupled with the continuation of the trade surplus, there is always a large number of "hot money", therefore, the total stock market fluctuations, soaring housing prices and other large commodities, small to "daily necessities" of speculation blamed on "hot money."　　Now, although in these areas there are "hot money" figure, but not all of the "hot money" effect. In fact, it is not always a net inflow of "hot money", which has been in a state of net outflows for many years. According to the calculation of the foreign exchange administration, since the 1994-year reform of the foreign currency management system, the flow of "hot money" in China has obvious pro-cyclical characteristics. 1994-2002, China's economic growth is relatively stable, the average GDP growth rate of9%, and under the impact of the Asian financial crisis, "hot money" total net outflow of nearly 400 billion U.S. dollars; in 2003-2010, China's economy overall showed rapid development momentum, the average GDP growth rate of 11%, the renminbi unilateral appreciation of the expected and expected to strengthen, "hot money" total net inflow of nearly 300 billion dollars. In general, 1994-2010, the early "hot money" net outflow and in recent years, "hot money" net inflow basically offset, the overall net outflow of about 100 billion U.S. dollars, accounting for the same period of increase in foreign exchange reserves of 3.5%.　　This means that for more than 1994-2010 years, China has been in total net outflow, and has even exported "hot money" to some extent. The report also believes that with the increase of China's economic strength and opening to the outside, the "hot money" flow on the accumulation of reserves and economic development has been less affected. Before and after the 1998 Asian financial crisis, the net outflow of "hot money" and GDP was about 8%, but then the overall downward trend, the 2010 "Hot money" net inflow scale and GDP ratio is only 0.6%.　　This shows that as China's economic total and foreign exchange reserves continue to expand, the "hot money" in the proportion of the overall economic impact is not very prominent. Still, it does not mean that the impact of "hot money" on China's economy can be ignored. In the author's opinion, the previous "hot money" effect is not very prominent because of China's strict foreign exchange control and China's open capital controls, with the increasing degree of international, China's capital controls will gradually open up, then, if the regulatory and institutional design is not perfect, then the future "hot money"　　Fast forward and fast out of the economy will still have a large or even serious negative impact, this south-East Asia, several developing countries such as Thailand, Vietnam and so on have been a cautionary tale. In short, "hot money" no longer mysterious, means that "hot money" is not so terrible.