This is the first time that China announced an official estimation of "hot money" to the public.

The figure accounted for 7.6 percent of the increase in foreign exchange reserves from 2009, SAFE said.

"The continuous capital inflows were mainly attracted by stable and rapid economic growth in China," SAFE said.

"That's a very small amount (compared to China's huge economy) and proved what we have been saying, that speculative cross-border inflows have a very limited impact on the economy," Wang Tao, chief China economist at the UBS Investment Bank, told China Daily.

Huawei Retreats

Chinese telecom equipment giant Huawei Technology Co. Ltd. scrapped its efforts to acquire the U.S. server firm 3Leaf Systems as a U.S. security panel refused to approve the deal.

Yao Jian, spokesman for MOFCOM, said the United States should make the approval process for Chinese enterprises seeking to invest in the United States more transparent.

Citing "security concerns," the U.S. Government rejected several previous bids by Chinese companies to acquire U.S. firms, such as Huawei's attempt to purchase U.S. technology firm 3Com in 2008, and Northwest Nonferrous International Investment Co.'s bid for mining company First Gold in 2009.

After Huawei's withdrawal, MOFCOM issued a statement saying "in recent years, some relevant parties in the United States have used various reasons, such as national security, to hamper Chinese firms' normal trade and investment activities in the United States," adding "such obstructions have already had an impact on the China-U.S. economic and trade relations."

According to rankings released by the World Intellectual Property Organization on February 11, Huawei ranked fourth in terms of patent application in the world. Analysts say that business acquisitions are quite common among global hi-tech and intellectual property giants.

Wu Yixin, a researcher with the Shenzhen Academy of Social Sciences, said the United States overacted and its stubborn stance would hamper normal business transactions between China and the United States.

Baidu in Trouble

Even before Google.cn moved its mainland search operation to Hong Kong last year due to censorship concerns, the NASDAQ-listed Baidu.com had been the biggest search engine on the Chinese mainland. Its dominant position was enhanced after Google's retreat.

However, the search engine behemoth may now face anti-monopoly scrutiny as a Chinese website, Hudong.com, an online encyclopedia, alleged that Baidu unfairly blocked its service.

On February 22, Hudong.com filed a complaint with the State Administration for Industry and Commerce (SAIC), requiring an investigation into Baidu and that the administration impose a fine of up to 790 million yuan ($120 million), or 10 percent of Baidu's annual revenue in 2010.

Hudong has its reasons. Its CEO Pan Haidong claimed his company's search results have always ranked first in other engines such as Google.com.hk, and Sogou.com.

It is uncertain how the SAIC may react to Hudong's complaint. The industry watchdog seems to have no worries as it has rejected three complaints against Baidu concerning monopolistic behavior since 2008.

According to figures from the research company Analysys International, Baidu's market share in China surged to 75.5 percent in the fourth quarter of 2010, while that of Google declined to 19.6 percent.

More investors are eyeing Baidu's lion's share in the search market and want a slice of the pie. Xinhua News Agency and China Mobile jointly launched an Internet search engine on February 22, known as

Panguso.com. It is expected to provide news, websites, images, videos and audio data for users and its service will also be present on mobile phones. Whether the green hand can pose a challenge to the dominant Baidu remains unclear.