catalogue
brief introduction
Stealing the concept of international hot money and translating it into international hot money
International liquidity
Short-term financial operation
A clear definition
International capital
dependent event
Scaling algorithm
scale
Three ways
The direction of [somebody]/[something].
brief introduction
Stealing the concept of international hot money and translating it into international hot money
International liquidity
Short-term financial operation
A clear definition
International capital
dependent event
Scaling algorithm
scale
Three ways
The direction of [somebody]/[something].
Expand and edit this introduction.
The main purpose of international hot money coming in is to make profits and preserve value, not to live in your own house. The focus of consideration is not the price level and cost performance, but whether there is international hot money.
How big is the upside and profit opportunities. For the sake of capital security, the first requirement of international hot money is to be able to enter and exit, and to be able to get rid of it easily when necessary.
Edit this paragraph to steal the concept.
International hot money is also translated into international hot money.
The definition of Oxford Advanced English-Chinese Learning Dictionary is: "The frequently flowing funds that speculators move from one financial center to another in pursuit of high interest rates and maximum profit opportunities." The definition of the New palgrave Dictionary of Economics is: "Under the fixed exchange rate system, the holders of funds devalue international hot money cartoons in anticipation of the currency.
Speculative psychology (or appreciation), or the international spread income is obviously higher than the stimulation of foreign exchange risk, which has set off a large-scale short-term capital flow around the world. This kind of flowing short-term capital is usually called international hot money. From these definitions, we can see that international hot money has three interrelated main characteristics: first, international hot money is a speculative fund, or funds used for investment and operation under the control of speculative psychology; Second, international hot money is a fund that flows frequently internationally (or at least between two financial centers), so it is a short-term capital flow, that is, an international capital flow with a term of 1 year; Third, international hot money either pursues international spreads or exchange rate differences, so financial investment is the basic way. In contrast, it emphasizes the view that "a large amount of international hot money flows into China" and modifies the definition at will. "Hot money is defined as international capital that profits by speculating in a country's financial market, and its speculative period may exceed one year. Profit methods include arbitrage, arbitrage and asset price premium. " As a result, the characteristics of international hot money have changed substantially in two aspects: first, international hot money is no longer a fund that flows frequently between more than two countries (or financial centers), but a fund that operates in a country's financial market; Second, international hot money is no longer short-term capital, "its speculative period may exceed one year", so it can be "cold money" or even "frozen money". The essence of this definition change is to completely change the space-time relationship of "international hot money", that is, change the time from 1 year to include both short-term funds and medium-and long-term funds, and change the space to include both international funds and domestic funds. Under this changed definition, commentators can create the concept of "international hot money" at will according to their own intentions, misleading people. Specifically: international hot money
International liquidity
The word "international" in "international hot money" emphasizes the international flow of such funds. Due to the lack of institutional conditions in various countries (or regions), international hot money comics
Similarly, therefore, the possibility of such hot money flowing internationally is different. Between countries (or regions) with basically open capital and financial accounts and fully convertible currencies, there are not too many restrictions on international capital flows, so international hot money (as a form of international capital flows) can also flow freely. However, in China, financial transactions in "capital and financial accounts" are not completely open to the outside world, and RMB is not fully convertible. Therefore, China has many institutional restrictions on the inflow and outflow of international capital. A prominent phenomenon is that all foreign funds that do not meet China's foreign exchange management regulations are not allowed to flow into China (nor are they allowed to flow out). In this context, "international hot money" has an important institutional color in China, that is, its inflow or outflow is illegal. This is also one of the main reasons why the statement that "international hot money flows into China in large quantities" has aroused great concern in China (in contrast, if this statement is introduced in the United States and other western countries, it is not news and has no hype value). However, after the above-mentioned revised definition changed the word "international" to "in a country's financial market", it circumvented China's institutional restrictions on capital inflow (or outflow), giving people the illusion that "international hot money" can freely enter and leave China and the relevant regulatory authorities in China can do nothing about it.
Short-term financial operation
The word "hot money" in "international hot money" emphasizes the short-term financial operation of such funds. "International hot money" directly belongs to the category of "international capital", but the difference between it and international capital investment is not "international" but short-term financial investment. The so-called "short-term" can be divided according to the different trading objects in the financial market, but it does not exceed 1 year in China or other countries and regions in the world. This means that if "international hot money" really flows into China, it must flow out of China within 1 year from the date of inflow; Once it flows out, there will be no international hot money in China (such as the increase of foreign exchange reserves or the balance of foreign exchange reserves in that year). Therefore, when calculating the international hot money flowing into China, the cumulative calculation method from 2003 to 2007 (that is, five-year cumulative) does not conform to the definition of international hot money. However, the above revised definition arbitrarily extends the term of international hot money to "more than one year" (the time boundary beyond 1 year is not defined). Therefore, on the one hand, "international hot money" is confused with other funds in "international capital", and it is easy to bring general international capital flows into the category of "international hot money"; On the other hand, foreign capital staying in China to invest in the real economy is randomly classified as "international hot money". A prominent example is that as far as international capital is concerned, once it enters China's real economy (such as FDI) by way of investment, its international "flow" has basically stopped, so it cannot be included in the category of "international hot money"; By the same token, the profits of these foreign investments are not remitted from China, and reinvestment cannot be counted as "international hot money" (counted as FDI in China). However, those who emphasize that "international hot money flows into China in large quantities" classify the reinvestment of these investment profits as "international hot money", and it seems that it also flows into China from overseas through illegal channels.
A clear definition
From an academic point of view, every concept has a clear definition, which defines the connotation and boundary of the concept. Understanding the concept definition is the basic platform for academic discussion and the basic premise for analyzing related issues. Otherwise, the use of the same concept has different connotations and extensions, and the parties to the discussion will not know what the other party is saying, so they will not be able to discuss with each other. Undoubtedly, some concepts of economics are not perfect, which need to be supplemented and revised by further in-depth discussion, but the premise is that there is sufficient evidence. At the same time, this supplementary revision has practical significance and theoretical value. However, those who emphasize that "international hot money flows into China in large quantities" have revised the connotation and extension of "international hot money", but have not put forward any convincing basis for revision (including theoretical basis and practical basis). As a result, people not only misunderstand the problem of international hot money in China, but also fall into the logical confusion of their own thinking. For example, they think: "subtracting the remittance profit from the annual FDI net cash inflow is equal to the hot money (including remittance profit and depreciation) hidden in the FDI channel every year." In other words, all foreign investment gains and depreciation not remitted from China are "international hot money". According to this principle, "international hot money" includes not only international capital invested in financial products, but also international capital invested in the real economy (but in their definition, international hot money is "international capital profiting from speculation in a country's financial market"), which leads to their estimation of international hot money being greater than their definition of international hot money. It is worth pointing out that it is not a scientific practice to expand the connotation and extension of the concept without changing the concept name.
International capital
Countries and regions pay full attention to "international hot money" because the sudden large-scale entry or withdrawal of these short-term funds may have a serious impact on the normal activity order of the domestic financial market, which in turn will lead to serious instability in economic and financial operations. But this is not the case with international capital. Adding it to the allocation of real economic resources in this country or region is conducive to improving the sustainable development ability of the national economy, and it is also controllable and predictable by relevant macroeconomic entities. Therefore, don't confuse "international hot money" with "international capital".
Edit the related events in this paragraph.
What major events in history have much to do with international hot money? 1 pound crisis (Soros attacks pound) Foreign exchange has quietly come to 2 Southeast Asian financial crisis! China stock market has gone extremely high in recent years. It was with the help of international hot money that Soros, the international "financial tycoon", created the Asian financial crisis in the late 1990s and subverted the financial system of the whole Southeast Asian countries in just half a year. Although these incidents are related to hot money, the root cause is macro-policy mistakes or institutional loopholes. Take the pound crisis as an example: the root of the pound's depreciation is its own policy mistakes, and other European countries do not cooperate with the rescue, which makes its currency depreciation expectation increase. Speculative funds represented by Soros will raise other currencies, accelerate the depreciation of the pound, and at the same time make some short-selling transactions and the stock market effect caused by the depreciation of the pound to make profits.
Edit the size of this paragraph.
algorithm
It is reported that there are generally two methods to estimate the scale of hot money flowing into China: one is the "error and omission" method, and the other is the residual method. Former international hot money
It directly calculates the "missing" data of the balance of payments compiled by the foreign exchange bureau as hot money, and the latter calculates the value of hot money by subtracting the trade surplus from the increase of foreign exchange reserves and the net inflow of foreign direct investment. In this regard, Hao Daming of Galaxy Securities believes that these two methods are subjective and have poor credibility, which leads to a big difference between the two estimation results and it is difficult to reach an agreement. The correct algorithm is: according to the analysis of hot money inflow channels and the statistics of import and export trade, determine the scale of hot money flowing into China through trade channels; Combined with the statistical data of fixed assets investment of National Bureau of Statistics, determine the scale of hot money flowing into China through direct investment channels; Combined with the foreign debt statistics of the State Administration of Foreign Exchange, determine the scale of hot money flowing into China through foreign debt channels; Then, according to the growth trend of unofficial current transfer and investment income, the scale of hot money flowing into China through current transfer and investment income channels is calculated.
scale
Although there are different opinions on the specific scale of hot money, some say 1.75 trillion US dollars, while others say 500 billion US dollars. In this regard, Hao Daming pointed out that according to the above algorithm, the total amount of hot money flowing into China from 2002 to 2008 was $480.7 billion. Among them, there were few hot money inflows in 2002 and 2003; In 2004, this proportion reached13%; After 2005, under the influence of high expectation of RMB appreciation and enhanced expectation of asset return, hot money inflows accelerated; In 2008, the injection of hot money was more turbulent and larger. Assuming that the growth rate of hot money in the first five months of this year is the same as that of foreign exchange reserves, the hot money flowing into China in the first five months of this year is 1 196 billion US dollars, and the hot money flowing into China in 2005-2008 is 459.3 billion US dollars, accounting for 40% of the new foreign exchange reserves in the same period. Li Youhuan said that it is generally recognized that hot money has flowed into China, and the next problem to be solved is how to deal with it. It is meaningless to struggle whether there is hot money and how big it is. However, the scale of 1.75 trillion calculated by China Academy of Social Sciences is overestimated, and the scale of hot money is far from that.
Three ways
Through what channels did hot money flow into China in recent years? Opinions vary, and no one can agree. Huang Wei, a professor of finance at Sun Yat-sen University, pointed out that international hot money
There are three recognized channels-current account, capital account and underground bank. Judging from the inflow scale of the three major channels, the current account is the most important way of hot money inflow. Hao Daming agrees with this statement. He pointed out that according to his own calculation, from 2004 to the first five months of this year, about $654.38+0962 billion of hot money flowed into China through trade in goods. Since 2005, the pace of RMB appreciation has accelerated, and government departments have begun to "prevent the inflow of hot money". Therefore, the way of hot money inflow began to be "refurbished", especially through false trade.
The direction of [somebody]/[something].
According to relevant media reports, the downturn in the stock market and the property market makes hot money not enter these two fields, but turn into bank deposits. According to the appreciation rate in the first quarter, the annual interest rate is 16%. After deducting the spread, the annual income of hot money deposited in the bank will reach about 12%~ 14%. In this regard, Li Youhuan believes that it is impossible for hot money to flow into bank deposits, and the changes in bank deposits can be calculated. If some accounts are funds withdrawn from the stock market and the property market, there is a way to find them. He believes that there are two main factors leading to the increase in bank deposits. First, the downturn in the stock market and the property market has caused some of the funds withdrawn from it to flow back to banks, which can be traced. Secondly, Hong Kong, Macao and Taiwan have more funds deposited in mainland banks. Some hot money entered the A-share market around 3,000 points, and all these funds are still trapped.