The resurgence of international hot money is leading to the stock market

In the last three months, Hong Kong's Hang Seng index rose from its low 11,344 point to its highest 19,161 point, up 68%. Although the inflation of the index has the factor of economic recovery, the real driving force behind it is the ample liquidity that international hot money brings to the Hong Kong market. Meanwhile, China's foreign exchange reserves were unexplained in March this year: foreign-exchange reserves rose by as much as $14.7 billion trillion. Does this mean that the international hot money leaving the mainland market in the second half of last year has returned to the mainland market?　　In this connection, the securities Times reporter recently interviewed a number of experts.　　The return of capital flows to the issue of whether the international hot money to return to the mainland market, the Chinese Academy of Social Sciences, China Economic Evaluation Center, Director of the Liu Yuhui, said in an interview with the Securities Times reporters that the current international hot money comeback argument is still premature. In his view, after the global financial crisis, the Chinese mainland's current economic environment compared with the past has a greater change. From 2002 to 2007, in the six consecutive years, China's economy in a sustained boom period, the overall economy steadily upward development, thus attracting a large number of international capital long-term inflow in the domestic market after the financial crisis, international funds gradually evacuated. While the global economy, especially emerging markets, is showing signs of warming, the so-called stabilisation and recovery can only be "minimal".　　In this sense, the main international capital funds into the mainland market environment is not the right time.　　However, the Fudan University China Anti-Money Laundering Research Center Secretary General Shini in the Securities Times reporter interviewed that the capital has begun to enter the domestic city often according to Fudan University China Anti-Money Laundering Research Center monitoring, since May this year, the capital has entered the mainland market has preliminary indications, but the specific scale is still unable to calculate　　Shini predicted that the influx of hot money into the mainland of China is mainly attached to the stock market and the resources of the industry, the proportion of three total of 90%, of which the stock market is the most attractive, the proportion of hot money attached to 40%, the property market second, to 30%, the resource industry is 20%. "The direction of Cross-border capital flows in China is likely to be reversed in the two quarter of this year," said Li Mingxu, an analyst with long-term concerns over Cross-border capital flows. He said international capital outflows were more pronounced in the four quarter of last year, but capital flows began to change in the two quarter of this year.　　From a big economic backdrop, China's economy will lead the recovery of other major economies, the renminbi will remain at an artificially low level against the dollar, the world's leading central banks have adopted an unprecedented easing of monetary policy, these three factors determine the possibility of hot money again flood into China. Short-term idle money has not yet "imported" "strict foreign exchange control and bear market stage after a sharp rebound in the huge risk, the international capital to stop the pace of entry." Liu Yuhui said, "Since the beginning of the year, the domestic a-share market has risen sharply, but this increase is mainly due to domestic ample liquidity." He said that the recentWorries about inflation and the depreciation of the dollar, as well as worries about debt under the Fed's easy monetary policy, do have a lot of money from the currency market to the outflow of Treasury bonds, to emerging markets with high investment yields, to commodity ETFs and to energy investments such as oil. However, these short-term hot money must keep fast forward fast out of the liquidity.　　As a result, foreign exchange control more free Hong Kong and other markets become the main target of hot money, and the more stringent exchange control in the mainland market for the entry and exit of hot money to set more thresholds. In this respect, the long-term study of China's hot money problem experts, Guangdong Provincial Academy of Social Sciences, deputy Director of the Institute of Industrial Economics Youhuan in the Securities Times reporters also hold the same view.　　Youhuan that the liquidity brought about by the loose credit policy of the mainland since the beginning of the year was the main reason for the sharp rise in the stock market and property prices for half a year, but the liquidity is the liquidity of the mainland market itself rather than the external liquidity. "The current rise in property prices is not normal, domestic economic fundamentals can not support such a rise, such a rise in the future will be a ' bitter fruit '." "Youhuan pointed out," in such an economic context, the international hot money will not choose to enter the mainland city often, "according to Youhuan's recent interviews with underground banks, underground banks have not recently seen a large-scale influx of capital phenomenon.　　According to the Guangdong Academy of Social Sciences monitoring, from the beginning of last October to this May, the domestic capital flow has been a net outflow state, and the number of monthly changes are not small.　　The question of whether financial inflows are sustainable for international capital inflows to the mainland, Liu Yuhui says the process of economic recovery and the volatility of the market in bear markets determine the unsustainable nature of international hot money entry. Li Mingxu, however, holds the opposite view. He believes that, although the Chinese economy has experienced a sharp decline in the stage, but this year has been a trend of economic recovery, the Chinese economy will be ahead of the rebound in Europe and America counterparts. As a result, global capital will be prioritized in China, a strategic judgment that will not be arbitrarily changed by short-term economic fluctuations.　　The recent signs suggest that the timing of this configuration may have arrived. He said that from the data of May this year, urban investment growth reached 45%, indicating that domestic investment demand recovery faster. And this investment trend in China's mainland market is irreversible in the next few years. This is also an important reason for international funds to enter the domestic market.