'Hot money' fear holds yuan settlement plan

BEIJING - The risk of a surge in "hot money" is one of the reasons why China is unlikely to allow foreign companies to make yuan investments this year, even though a feasibility study was completed last year, said an unnamed source with the Ministry of Commerce (MOC).

"The ministry looked at permitting foreign enterprises to invest using the yuan last year, but launching the plan will still take quite a long time," an official from the ministry in charge of foreign exchange issues told China Daily on condition of anonymity.

"Hot money", or short-term speculative capital, is a major concern for economic planners as it leads to quickly rising prices in the sector it targets.