NDRC official rings 'hot money' alarm

China may see "huge" inflows of speculative capital as foreign investors step up bets on yuan gains, making it difficult to manage liquidity, said Zhang Xiaoqiang, vice-minister of the National Development and Reform Commission (NDRC).

Loose monetary polices in developed countries, a weakening US dollar and China's economic recovery will put renewed pressure on the yuan to appreciate, Zhang said in a statement yesterday.

Overseas investment is estimated to have increased in 2009 and the country is becoming more reliant on foreign economies, he said.