U.S. Federal Reserve cut interest rates again intensified "hot money" into China into a trend?.

<P> 29.30 local time, the Fed held the first time in 2008 monetary policy meeting. .Market expectations the Fed will cut rates further at this meeting. .22 emergency conference call on the Federal Reserve has cut interest rates 75 basis points in U.S. interest rates have led to an "upside down" phenomenon. .Domestic and foreign institutions economists interviewed said that this will make the interest rate differential between China and further expansion will also make the "hot money" has become a trend, which will form the central bank sets monetary policy challenges. .</ P> <P>: http://finance. Citibank China chief economist, Shen Ming high expectations this summer, the U.S. federal funds rate from the current 3.5% to 2? 2.5%, which means .The Fed in the first half and 100? room to cut interest rates 150 basis points. ."At that time, not just a one-year deposit rates appear 'upside down', inter-bank lending interest rates will appear 'upside down'. This will encourage more foreign investors to hold the RMB assets, also increased the pressure on RMB appreciation. ."</ P> <P> for" hot money "into China's problems, Shen Ming high that this trend does exist. ."The current problem is that the Fed rate cut, the next European Central Bank, Bank of England, Bank of Canada cut interest rates and other measures may also be taken, the liquidity of the market will be more and more. Inflow of some capital investment may be relatively safe .emerging markets, including China. and China the problem of liquidity is likely to deteriorate further, asset prices, inflation and other pressures. "</ P> <P> Wang Qing, chief China economist at Morgan Stanley, said, .spread "Upside Down" make "hot money" flowing into China will be more intense, but because of the implementation of capital controls in China, so the interest rate differential "upside down" before and after the inflow of "hot money" amount and will not change much. .</ P> <P> Shen Ming high that, from the perspective of foreign trade surplus, capital inflows into China may reduce, but from the perspective of foreign direct investment, capital inflows into China are likely to increase the speed. .In addition, unbalanced regional development, have made limited "hot money" has become more difficult. .</ P> <P> In fact, there are no publicly available data show that how much "hot money" into China. .Shen Ming Gao pointed out that in our country under the control of capital, even if there are "hot money" into China will become "cold money." .On the one hand, "hot money" out of China's costs are higher. .On the other hand, "hot money" into and out of China may realize more difficult, so do the long-term investment in the mainland going to do. ."The real danger is that, if a sudden one day the Chinese capital opened a lot of 'cold money' may be sudden outflows, which is very unfavorable exchange rate stability. 'Hot money' real risk may not now, and in the future, which .the reform of the capital account, higher demands. "Shen said Gao. .</ P>.