Hot money may flow back to China in the next few months and once again create bubbles in the stock market and the property market, a government think tank said in its latest report.

The current international financial crisis may come to an end by the second half of 2009, researcher Zhang Ming of the Chinese Academy of Social Sciences (CASS) said in the report. "By then, international capital will start to flow back to emerging markets including China," said Zhang.

In the first half of 2009 China's stock market and housing market will continue to face a period of adjustment. But when international speculative funds flow back to China in the second half of the year, prices in the equity market and property market may be pushed up, causing bubbles in the two markets.

The report also warned the government against over-doing its rescue efforts by adopting greater economic stimulus measures than the market really needs. The combination of the return of hot money and too generous stimulus packages would put China's capital markets at risk, the report said.

For more information, please read the full story in Chinese:

http://www.nbd.com.cn/_NewShow.aspx?D_ID=141889

(China.org.cn by Yan Pei, January 9, 2009)