China's business press carried the following stories on Tuesday. China.org.cn has not checked the stories and does not vouch for their accuracy.

BOC report: CPI expected to rise 3.7% in Q2 - China Securities Journal

China's consumer price index (CPI) will hit 3.7 percent in Q2, with economic growth at an annualized rate of 10.5 percent, the Bank of China said in a recent report.

The bank forecasts CPI will rise 3.8 percent and 4.4 percent in May and June. CPI growth for the whole year is seen at about 3.5 percent.

The report predicts GDP to increase by 9.5 percent in 2010, up 0.8 percent from last year.

The bank says a hike in interest rates is unlikely in the short term, but adjustments to the reserve requirement ratio and issuing of central bank notes will continue. Future monetary policies may focus on mopping up liquidity and cooling commodity price hikes, the bank said.

Hot money inflows exceeded US$70 bln in Q1 - Economic Observer

Hot money inflows into China reached U$71.5 billion in the first quarter of this year, exceeding the US$69.5 billion capital inflows in the whole year of 2009, according to statistics released by the People's Bank of China (PBOC).

Statistics show that China's funds outstanding for foreign exchange in Q1 reached 747.76 billion yuan (about US$109.53 billion). A recent report of Shanghai Securities News quoted sources as saying that April's funds outstanding for foreign exchange could reach 374.7 billion yuan, up by more than 100 billion yuan month-on-month. Since hot money is equal to funds outstanding for foreign exchange, plus trade surplus, plus foreign direct investment (FDI), April's hot money inflow could be approximately US$45.8 billion.

Hot money inflows stood at US$21.38 billion, US$12.79 billion and US$37.39 billion in the first three months of this year.

The underground banking system is one of the major channels for hot money flowing into China. Shenzhen police recently closed down 29 underground banks, with illegal operations involving over 12.7 billion yuan.

"Hot money flows have been accelerating into China since March," said Li Youhuan, director of a research center at Guangdong Academy of Social Sciences.

With the emerging downward trend of China's property market, hot money will start to target the stock market, Li noted.

Subsidy program for new energy cars to pilot in 5 cities - Economic Observer

 The subsidy program for private purchase of new energy vehicles will be piloted in five key cities in China, the Economic Observer reported Tuesday, citing people close to the matter.

"Individual customers in Beijing, Shanghai, Shenzhen, Chongqing and Wuhan will be the first to receive subsidies for purchasing new energy cars," the source said. The pilot program will not be expanded nationally in the short-term and future policy-making will depend on the success of the program in these five cities.

The government chose these five cities because they already have a foundation in the development of new energy cars. The Economic Observer was also told that Foton, Shanghai Automobile Industry Corporation, BYD, Chang'an Motor, and Dongfeng Motor will be in the vanguard of the development of new energy vehicles in these five cities.

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