Hedge fund Invasion? Expert sez No way, Jose

Despite the recent fluctuations in the exchange rate of the Renminbi (RMB), China's currency, international hedge funds are unable to flood the country and profit from the future appreciation of the RMB. Mei Xinyu, a senior researcher with the Chinese Ministry of Commerce, made the remark in an interview with Xinhua.

Strict management of capital account inflows and outflows prevents hedge fund and other speculative money from invading China to bet on the RMB's value, he said.

Although overseas hedge fund managers wish to buy more RMB, they can't do it because the country does not provide corresponding financial derivatives, he said.

"If these hedge funds want to bet on an appreciating RMB, they will have to choose nearby markets in Singapore and the Republic of Korea," he said.

Speculation about the future value of China's currency, the yuan, has hotted up since February, an official research report said last month.

Hot money inflow reached 1.02 billion, 4.45 billion, 5.31 billion and 12.5 billion U.S. dollars in February, March, April and May, respectively, said the report from the international center of the National Bureau of Statistics.

There is no clear definition of hot money. The figures were calculated by deducting foreign direct investment and trade surplus from the increase in the country's foreign exchange reserves, a standard calculation method, the report said.

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