China will tighten controls on foreign investment in real estate to curb inflows of so-called "hot money," Minister of Commerce Chen Deming said. The country's foreign exchange reserves rose by US$460 billion last year, including US$250 billion from the trade surplus, Chen told reporters in Beijing yesterday.

About 40 percent of the remaining US$200 billion is estimated to have come from inflows of capital from speculators betting on a yuan appreciation through investment in real estate.