U.S. dollar landed in Hong Kong "bridge" capital net inflow surging hot money comeback

With more than 20 billion dollars to hedge hot money, the data from the Hong Kong Monetary Authority as at the end of May show an important fact: this is the largest hedge since 2004 to come to Hong Kong hot money.　　Both the Hong Kong stock market and the housing market have both risen, making the Hang Seng Property index up 54% since the beginning of March. This trend has to be doubted: is hot money again landing in the mainland after the low tide last year? The signs of China's economic bottom are getting clearer, and the net inflow trend in China's foreign exchange capital account is becoming increasingly apparent. "We estimate that the pressure for capital outflows and inflows has been balanced since the first quarter of 2009." "June 1, Peng Wensheng at, a research director at Barclays China, keenly captures the message.　　Through long-term monitoring of foreign exchange data, he estimated that the net outflow of non-FDI capital in the fourth quarter of 2008 was less than $60 billion trillion, significantly smaller than the previous net outflow of USD 100 billion.　　June 1, the new U.S. Treasury Secretary Timothy Geithner began his first trip to China, "the dollar is bound to strong" is its main argument. Based on the above judgments, Peng Wensheng at in an interview with the firm that the yuan to break the stability of the exchange rate against the dollar will begin the upcoming new round of the renminbi against the dollar appreciation. Simpfendorfer, chief China economist at RBS in Hong Kong, who endorsed the trend, gave a timetable for the Appreciation series. "The renminbi will stabilise until the 4 quarter of this year, followed by a rise in the dollar's soft background, with a combined range of about 2% per cent."　　"he said. This clearly pushes the internationalisation of the renminbi into an urgent negotiating table. Sherman Chan, Asia-Pacific economist at Moody's, told reporters with no doubt: "The exchange rate regime pegged to the renminbi will be an inevitable trend." He predicts that the broader pilot will begin later this year with 400 companies in at least five major cities participating in Hong Kong's trade settlement.　　In the short term, foreign companies will be more active in renminbi trade settlement because they expect the renminbi to appreciate in the long term.　　There are indications that the net inflow pressure is Jechanzheng. The HKMA website shows that the Hong Kong Monetary Authority has intervened to inject liquidity into the market at least 9 days in May. Since January this year, the HKMA has invested more than $22 billion trillion in Hong Kong dollars to the market and has been ramping up its efforts in March-April with a focus on $11 billion trillion in order to keep the Hong Kong dollar against the dollar within the stipulated trading range.　　The Hong Kong HKMA last year launched a massive HK $2004. How long can Hong Kong fight such a massive hedge against hot money?　　The Chinese head of a foreign investment bank stationed in Hong Kong said it was not daunting enough that the dollar landed in Hong Kong only to "cross the bridge" and that the dollar's depreciation was inevitable, and that hot money was just keen to invest in equities and the housing market. Backed by a strong mainland market, Hong Kong is considered a front for hot money. "As financial markets stabilise, the dollar's appetite for risk will rise, and with concerns about the monetization of the US government's fiscal deficit, money willOut of the dollar, emerging markets, including China, will benefit.　　"Peng Wensheng at said.　　The result of the first-quarter FDI decline of 20% per cent over the same period last year has led Moody's Sherman Chan to believe that, given the severe global financial turmoil, this may still be a satisfactory result: foreign investors remain keen to travel to China because of the potential for growth in the domestic market. In the judgment of the trend of capital flow, Peng Wensheng at from the domestic economic recovery and the future weakness of the dollar two points of view to draw conclusions. "Benefiting from fiscal and monetary stimulus, we expect investment to lead to a significant rebound in China's growth in the second half of the year, with GDP reaching an annual growth rate of nearly 8% per cent year-on-year, so that there will be less pressure on the renminbi to appreciate excessively and depreciate," he said.　　"He believes that the depreciation of the dollar against other major currencies will lead to a devaluation of the renminbi against other currencies, as well as an increase in expectations of the renminbi's appreciation, leading to capital inflows." Bank credit is becoming the main source of broad monetary growth in the context of a decrease in the overall net inflow of international payments and a decline in foreign exchange reserve growth. Barclays forecasts that bank lending still has a lot of scope to expand, as the average loan-to-deposit ratio of the banking system is still about 70% below.　　Peng Wensheng at that this free monetary space is sufficient to deal with the impact of possible capital outflows on the domestic monetary environment.　　The outlook for RMB appreciation is clear: the real goal of hot money rushing into the market is that the renminbi appreciates. A hedge fund manager in Barclays, UK, told reporters that export profits had been diluted to 10% per cent in the current uncertain export situation, and that if the renminbi appreciated, the export sector would be pushed further towards survival. "With China's export sector already on the line, the rise in the renminbi's export competitiveness is certainly not what the Chinese government would like to see." "On May 31, Liu Guangxi, director of the Capital and Finance project management of the State administration of foreign exchange, responded at the PKU Forum:" In fact, we have no qualms, no hesitation, how long this process timetable depends on the soundness of China's financial system. "Beijing University China Economic Research Center Professor Chen Ping reverse thinking, raised a question:" China for a long period of time, to solve the employment problem and industrial upgrading is a pressing task, it is impossible to open up the capital account Control prematurely. "It is fair to suggest that the benefits of the renminbi as an international currency may not be as costly as investing in hot money."　　But it would be advantageous to pursue a contract with the renminbi to avoid currency risk.　　Peng Wensheng at based on the analysis of capital account flow, the recent stability of the dollar exchange rate reflects the policy level of economic growth and capital outflow concerns, in the last two months, the dollar has depreciated 2.5%, the renminbi has appreciated 0.3%. Simpfendorfer firmly believes that maintaining the renminbi's modest appreciation in a steady manner is an important condition for the wider adoption of the renminbi as a settlement currency. Simpfendorfer expects the renminbi to start appreciating in the 4 quarter of this year, with a modest appreciation of 2% over the next 12 months. At the end of the 4 quarter of 2009, the U.S. dollar against the renminbi will be 1:6.7 to 2010The 2 quarter of the year is 1:6.5. The crisis has also brought another issue to the table, the process of internationalisation of the renminbi. Sherman Chan said: "The exchange rate regime pegged to the renminbi will become an inevitable trend, even in Hong Kong's government departments." "He expects the broader regional settlement pilot to start in the second half of this year and to expand to 400 companies in at least five major cities to participate in Hong Kong's trade settlement, as well as the expected long-term appreciation of the renminbi."