The People's Bank of China (PBC) will strengthen supervision and control over the inflow and outflow of overseas "hot money" into property market in some areas, a central bank official has said.

 

Li De, director of the Finance Risks Division of the PBC Research Bureau, the central bank, told an international forum on housing finance system on Wednesday that a great amount of foreign funds had flowed to the housing market of China's eastern coastal areas.

 

On the one hand, he said, the foreign investors bet the further appreciation of Chinese currency, or the yuan, and on the other hand, they hope to make profits via the country's soaring housing prices.

 

The foreign funds have exerted profound influence on China's property market, he said.

 

Taking Shanghai as an example, he said, foreign funds flowed into Shanghai last year totaled US$1.58 billion, helping push up housing prices in the city sharply.

 

Housing prices have continued to soar in China this year, despite the government's year-long efforts to stabilize prices. This has sparked grave concern that a housing bubble might burst.

 

(Xinhua News Agency April 28, 2006)