Money inflows a real worry

BOAO, Hainan: China should remain wary of hot money inflows as investors and speculators turn to emerging economies in the wake of the sub-prime crisis, a central bank advisor said at the Boao Forum for Asia.

"China is seeing an even stronger capital inflow now, despite some nations suffering a credit crunch," Fan Gang, a member of the central bank's monetary policy committee, said.

China's foreign exchange reserves, the world's largest, increased by $153.9 billion in the first quarter, compared with $135.7 billion during the same period a year ago. But less than one third of the gain could be attributed to its $41.4 billion trade surplus during the same three-month period.