Hot money influx is 'cooling down'

The influx of speculative money from overseas, or hot money, into China's stock market is showing signs of slowdown thanks to recent cooling-down measures by the government, analysts said.

The increase in foreign exchange reserves not attributed to trade surplus or foreign direct investment declined from $73 billion in the first quarter to $48 billion in the second quarter, according to data from investment bank Lehman Brothers and CEIC, an international financial information provider.

China registered a rise in foreign exchange reserves of $131 billion in the second quarter. Despite its high percentage in annualized terms, the actual amount is less than the $136 billion that China earned in the first quarter.