SHANGHAI (Reuters) – China should raise the costs of short-term, cross-border money flows to buffer its financial markets from speculative capital, said Zhu Min, head of the National Institute of Financial Research at Tsinghua University, as cited by the People’s Daily.
Zhu, a former deputy managing director of the International Monetary Fund, also said China should step up monitoring cross-border trading activities to maintain market stability, China’s official daily newspaper reported on Tuesday.
Against a backdrop of great economic and financial uncertainty, and with increasing links between global markets, “the volume and speed of cross-border capital flows are unprecedented,” Zhu told the newspaper in an interview.
“This will not only result in sustained fluctuations in major world currencies, but will also lead to higher volatility in global financial markets. Therefore, we must be prepared for potential risks.”
Zhu’s cautionary comments come amid signs that foreign money has been flowing into