China News Service, July 10, 10th, the central bank held a press conference for financial statistics in the first half of 2020. Wang Xin, director of the Central Bank Research Bureau, said at the meeting that relevant central bank departments and foreign exchange bureaus attach great importance to the "hot money" flow phenomenon.
Data Map: People's Bank of China. China News Service reporter Zhang Xinglong photo
Wang Xin pointed out that the current international economic and financial situation has changed in many ways, and with the expansion of China's financial reform and opening up, the scale of my country's cross-border capital flow is also increasing, which is normal. The relevant departments of the Central Bank and the State Administration of Foreign Exchange attach great importance to the phenomenon of hot money flow. Academia has different views on what hot money is, and there is much debate. But the consensus is that we need to be highly vigilant about large-scale cross-border capital flows in the short term. Macro-prudential management of cross-border capital flows is also necessary. Of course, some micro-level supervision is also included to prevent risks. This is because large-scale cross-border capital inflows and outflows in the short term may impact and affect the stability of the domestic economic and financial system.
At present, various economies in the world have taken many measures to cope with the new coronary pneumonia epidemic and promote economic growth. In particular, the monetary policies adopted by the major central banks in Europe and the United States have been very strong, which may cause large-scale short-term capital flows around the world. Moreover, some new economies have already been hit by short-term capital flows and may even have financial risks. In particular, those economies that were already very fragile in economy and finance before the epidemic, coupled with weaker epidemic prevention systems and health systems, would be more affected by the impact of the epidemic. Under such circumstances, some emerging economies will be hit harder by hot money, and we need to pay close attention.
Wang Xin said that overall, my country's ability to deal with the epidemic and cross-border capital flows are very strong, including my country's first global recovery, the soundness of the financial system, and sufficient foreign exchange reserves.