China vows 'hot money' clampdown

ALARMED by the flood of so-called hot money into the country, Beijing has vowed to crack down on illegal transfers that are helping to swell its foreign currency reserves.

The influx is driven by speculators hoping for a revaluation of the yuan, now pegged in a tight range against the US dollar at a rate of 8.28.

China has come under severe pressure from both the US and Japan to revalue its currency, which they claim is dramatically undervalued.

This week Beijing said its reserves reached $356.5bn (£232.9bn) at the end of July, up from $346.5bn a month earlier.

This was driven by foreign investment, China's trade surplus and the transfers from abroad.

The State Administration of Foreign Exchange said it would step up its probes of foreign exchange dealings.