Some speculative funds, or the so-called "hot money" may be flowing into the country to bet on a yuan appreciation, but the amount was "not big", central bank Governor Zhou Xiaochuan said in Beijing yesterday.

　　The reason is that China still imposes foreign exchange controls to some extent, he told a press conference during the annual session of the National People's Congress.

　　China's forex reserves, which rocketed to US$609.9 billion - second only to Japan - at the end of 2004, consist largely of trade surpluses, non-trade surpluses and capital investment from overseas, according to Zhou, governor of the People's Bank of China.

　　As a matter of fact, the reserves started to surge not in 2004, but as early as 2002, against the backdrop of China's economic start-up following the Asian financial crisis, he said.

　　Forex reserves should be denominated in a number of currencies, instead of the US dollar alone, and should comprise diversified products in a bid to ward off risks, Zhou said in reply to a German reporter's question on whether China would hold more euro-denominated assets.

　　"We have long attached importance to the holding of a certain amount of euro assets," Zhou pointed out.

　　Zhou revealed that the planned share-offerings and listings of state-owned Bank of China and China Construction Bank are "not too far away."

　　The banks' stock market debuts should be decided by their board of directors and depend on whether there are "windows of opportunity" on the capital market, he said.

　　The banks were also consulting overseas and domestic investment banks, their financial advisers and accounting firms regarding the timing, Zhou added.

　　Both BOC and CCB have completed financial reshuffle and need to strengthen corporate governance and accelerate on some internal reforms, Zhou told reporters.

　　BOC and CCB, considered as financially healthier banks among China's big four that also include the Industrial and Commercial Bank of China and Agricultural Bank of China, are leading the government's latest reform in the financial system.

　　The two banks received a bailout worth a combined US$45 billion in foreign exchange reserves at the end of 2003 from the central government.

　　In reply to a question on "whether the central bank plans to move some of its operations to Shanghai", Zhou said the city branch of the central bank should play a "better and all-round" role in providing services for the national financial market.

　　(Xinhua)