What Causes Speculative Fund Inflow to China?
The determinants of the massive overseas speculative fund inflow to China in recent years are investigated. Results indicate that appreciation of the Chinese currency is the primary underlying force for the influx of funds. Speculative funds aim to earn a short-term profit due to the relatively higher interest rate in China as opposed to that in the United States. On the other hand, housing and stock markets do not directly cause the inflow of speculative funds, even though the funds may appear to target investment in these markets.
Volume (Year): 43 (2010)
Issue (Month): 5 (January)
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