Part 5 of China’s “Hot Money” Problems. If the Chinese government determines it is necessary to take action, it has a number of options on how to slow down the flow of “hot money.” However, each option has potentially negative side effects. Appreciate — or Depreciate — the RMB. An increase in the value of […]
Part 3 of China’s “Hot Money” Problems. While there may be some uncertainty about the precise amount of “hot money” flowing into China, there appears to be a general agreement as to why speculators are moving their capital into China. Analysts point to two key factors: (1) the relative interest rates in China and the […]