China's first quarter double surplus monetary policy faces dilemma

Abstract: China State Administration of foreign exchange for the first time released quarterly Bop account, a regular double surplus with capital projects, foreign exchange reserves to restore rapid growth, the trend of net capital inflows intensified.　　The Chinese central bank will be more in a dilemma over monetary policy, as hot money inflows increase in anticipation of a stronger renminbi. China State Administration of foreign exchange for the first time to release the quarterly Bop account, a regular double surplus with capital projects, foreign exchange reserves to restore rapid growth, the trend of net capital inflows intensified.　　The Chinese central bank will be more in a dilemma over monetary policy, as hot money inflows increase in anticipation of a stronger renminbi.　　However, the current account surplus as a share of GDP since 2008 has been declining for three consecutive years, revealed that China's economic growth is from the past too much reliance on external demand to pull to the balance between internal and external demand for a good situation.　　But with international investors optimistic about China's economy, the net inflow of capital also led to the rapid growth of foreign exchange reserves, the first quarter at the end of the foreign exchange reserves reached 2.45 trillion U.S. dollars. Cheng, vice chairman of China's former Standing committee, said in a previous interview with the media that a big increase in foreign exchange reserves, which means that the underlying currency is being put up, will partly offset the effectiveness of a range of policies that China has taken to recycle liquidity, including raising reserve requirements, issuing central votes, and so on, he added. As the most effective way to deal with inflation, China should not move first, "If China rises first, it will attract more hot money inflows." "There may be greater volatility in cross-border flows of international capital, and the trend of net foreign exchange inflows in China will continue for some time to come." The central bank had also made it clear that it would intensify the crackdown on various types of irregular cross-border capital flows, thus deterring "hot money" inflows. "According to the Reuters article comprehensive analysis"