Speculation over the appreciation of China's 
currency, the yuan, has staged a comeback since February, an official research 
report said Tuesday. 
Hot money inflow reached 1.02 billion, 4.45 billion, 5.31 billion and 12.5 
billion US dollars in February, March, April and May, respectively, said the 
report from the international center of National Bureau of Statistics. 
There is no clear definition of hot money, and the figures were calculated by 
deducting foreign direct investment and trade surplus from the country's foreign 
exchange reserve increase, a normal way of calculation in the world, the report 
said. 
Investment from Hong Kong and other sources outside China's mainland has 
poured into the real estate sector, apparently hoping to profit from rising 
prices and an anticipated rise in the yuan, which would push up the value of 
mainland assets in foreign currency terms. 
Such investment rose 27.9 percent in the first six months of the year, 
compared with the same period of 2005, the Ministry of Commerce said. This 
prompted the government to release on Monday proposed rules that would let 
foreigners face restrictions on residential property purchases, though details 
have yet to be hammered out. 
"Effective measures should be taken to gradually quash the betting on the 
appreciation of renminbi ("people's money," another name for yuan)," the NBS 
report said. 
Market-oriented reforms on China's exchange rate system should be pushed 
forward, it added, referring to the move China announced exactly one year ago to 
scrap the yuan's peg to the US dollar, while linking it to a basket of 
currencies, and allow the currency to float within a managed band. 
The yuan has since risen about 3.5 percent, less than some daily movements of 
the dollar or euro. 
The United States says the yuan's rise is too small, adding to complaints by 
some U.S. companies that the yuan is undervalued by up to 40 percent, giving 
China's exporters an unfair price advantage and hurting foreign rivals in the 
Chinese market. 
But many Chinese officials and economists say China's currency reform 
reflects a major improvement as a new floating mechanism has been imposed on the 
exchange rate. 
"Though there is still room for improvement of the determination mechanism 
for the yuan's exchange rate, it is clear that another one-off, 
government-ordered revaluation will not happen," the National Bureau of 
Statistics spokesman Zheng Jingping told the press last Tuesday. 
The yuan was traded at 7.9870 to the US dollar on Tuesday. 
The NBS report also includes policy proposals about "encouraging domestic 
firms to make more investment abroad and appropriately control overseas capital 
inflow."