Hot Money Commandos; Behind The Scenes

　 Only two months from September to November in China cotton The price soared from 18000 yuan per ton to more than 30000 yuan, which made Teng Minli, chairman of Xinjiang Hongli Cotton Industry, who has been engaged in cotton processing for many years, jumpy.

Teng Minli sighed that this year, there were many new faces in the market. Many Wenzhou people were two or three people who collected three million yuan to sell two or three cars. Although they didn't have much money, they kept up with the trend. Ge Yongpin, president of Zhejiang Chamber of Commerce in Xinjiang, predicted that at least 10 billion Zhejiang private capital would be withdrawn from the coal mine and real estate market and moved to the booming cotton market. In fact, with the help of hot money, garlic, ginger and Chinese herbal medicine markets are all copying the craziness of the cotton market.

Since the second half of 2009, garlic and ginger have been produced in one season and throughout the year consumption ”Our durable agricultural products were artificially hyped and their prices soared. According to the data of the Ministry of Commerce, the wholesale prices of garlic and ginger rose 95.8% and 89.5% year on year respectively in the first ten days of November. The value of traditional Chinese medicines such as cordyceps sinensis, codonopsis pilosula and panax notoginseng has doubled. A drugstore manager lamented that the price of traditional Chinese medicines is now "almost one price a day".

Data shows that from October last year to October this year, 28% of the varieties of Chinese medicinal materials have increased between 51% and 100%, and the price of more than 20% of Chinese medicinal materials has almost doubled. The prices of 15 kinds of traditional Chinese medicines, such as the most commonly used traditional Chinese medicines, such as Tuckahoe, loquat leaf, platycodon grandiflorum, wolfberry fruit, ophiopogon japonicus and Fritillaria thunbergii, rose by more than 100%.

Irregular flow of hot money boosts inflation expectations

The relevant person in charge of the National Development and Reform Commission pointed out that some hot money and illegal operators manipulate the prices of related commodities by fraud, collusion, bid up, hoarding and other improper means, which is the direct driver of the price rise of some agricultural products. Behind the rapid rise of mungbean prices in the first half of the year, there was a phantom of collusion among mungbean operating enterprises.

Gu Shengji, Vice Chairman of the Central Committee of the People's Republic of China and economist, pointed out that in a quite long period of time, equity market , the property market and the coal market are the three major markets in which China's private hot money pursues huge profits. But now, with the restructuring of coal resources, the introduction of real estate regulation policies, and the continued downturn of the stock market after the financial crisis, private hot money has turned to the "vegetable market" and the circulation of agricultural and sideline products, where the price is relatively low and there is a demand gap. The disorderly flow of large-scale private hot money has further boosted people's inflation expectations, formed greater inflationary pressure, and increased the risk of fluctuations in economic operation.