Other economists have expressed concerns that efforts by the Chinese government to control "hot money" inflows could have significant negative consequences for the U.S. and global economy in the form of slower growth, greater inflation, or both. Some Chinese experts reportedly predict that the amount of "hot money" in China will rise to $650 billion by the end of 2008. Impact of "Hot Money" on China's Economy

The main concern in China over the influx of "hot money" has been that it may add to China's inflationary pressures. The large flow of "hot money" is causing a sharp rise in China's money supply, resulting in inflation.
China has experienced a sharp rise in the inflow of so-called "hot money," foreign capital entering the country supposedly seeking short-term profits, especially in 2008. Chinese estimates of the amount of "hot money" in China vary from $500 billion to $1.75 trillion. The influx of "hot money" is contributing to China's already existing problems with inflation. Efforts to reduce the inflationary effects of "hot money" may accelerate the inflow, while actions to reduce the inflow of "hot money" may threaten China's economic growth, as well as have negative consequences for the U.S. and global economy. This report will be updated as circumstances warrant.