BEIJING, Dec. 7 --  Hot money valued at 24 billion U.S. dollars was taken out of China in the first half of this year during the crackdown on the booming real estate market, Standard Chartered said in a report Wednesday.

    The bank estimated the value of the money not covered in current, capital and financial accounts. It tracked errors and omissions in the balance of payments, calculated the difference between foreign currency reserves and studied valuation effects.

    "We are sympathetic to the view that the rumors and actual crackdown on residential real estate price growth in the first and second quarter played an important role (on the outflow of the informal capital)," said Stephen Green, senior economist at Standard Chartered.

    With asset prices growing by 20 percent and China's yuan likely to rise, the motives are there for people to import funds, the report said.

    China's central government took measures to curb the property boom by raising interest rates and levying a 20 percent tax on second-hand property transactions.

    Property prices tumbled in Shanghai after such measures. And growth in real estate prices slowed down in cities including Hefei, Nanjing and Shenyang.

    As property price growth has slowed, the easy money has been made, thus causing flows in capital to slow down and perhaps reverse, Green said.

    Another reason is likely that all money placed in anticipation of a rise in the yuan has already been positioned.

    China's yuan has gained 5.8 percent from 8.3 per dollar, when it was depegged from the greenback in July 2005. Economists expect the yuan to rise even further to 7.5 per dollar by the end of next year.

    Declining returns in investment in China could be another reason for the currency flows.

    (Source: Shanghai Daily)