Forex regulator warns potential risks still exist despite negative flow of 'hot money' last year

China's foreign exchange regulator has warned of the potential risks of increased capital inflows in 2013, despite annual calculations showing that the flow of "hot money" turned negative last year.

There have been ongoing fears that China may face a rebound in capital inflows this year, partly due to the ongoing loosening in monetary policies by developed countries as well as growing interest in the Chinese economy from foreign investors.