China's high economic growth and expectations of a stronger yuan are luring global speculative funds into its stock and property markets, a senior foreign exchange regulator said in remarks published on Monday.
Deng Xianhong, vice head of the State Administration of Foreign Exchange, said China must step up efforts to reform exchange rate policies and let the market play a fundamental role in deciding the value of the yuan.
Against the backdrop of the global financial crisis, China's good economic fundamentals, a strengthening currency as well as a positive gap in interest rates between home and abroad have been the main reasons attracting a continuous inflow of foreign capital, Deng told the official People's Daily.
Since February, the administration had detected 190 illegal foreign exchange transactions involving a total sum of $7.4 billion, he said.
(Reporting by Langi Chiang; Editing by Jonathan Hopfner)