As China's economy grows quickly and steadily, it's become a target for a flow of hot money. Data from the central bank shows that by the end of September, around 40 billion US dollars had appeared in the country's forex reserve balance seemingly from nowhere. This money has now attracted attention from related departments.

Data shows that China's forex reserves rose by nearly 62 billion US dollars in September on the previous month. Subtracting the trade surplus and foreign direct investment, the remaining 40 billion US dollars is so called hot money, that is it hasn't come from investment, but speculation.

Xi Feng, Vice President of CITIC Securities said "The US dollar has depreciated since August and September. So capital flows on the international market have accelerated. Figures show that a large amount of hot money is flooding into the Chinese market."

The depreciating US dollar and recovering Chinese economy have driven the hot money inflow. The volume of hot money coming into China surged in September and October, mostly through illegal private banks.

Li Youhuan, Guangdong Academy of Social Sciences said "Illegal private banks in Guangdong Province have seen hot money inflows increase by 40 percent in September above last year's highest level."

China's central bank began to withdrawal capital from the market in October, in order to avoid risks which can be caused by over-liquidity

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