Beijing has genuine concerns that the mainland would be the top destination for the hot money as overseas investors seek to cash in on its strong growth and the potential upside of further yuan appreciation.

It is difficult to estimate the size of speculative capital flowing into the mainland as the bulk was invested through illegal channels because of China's tight capital controls. But one can safely assume that it's billions of US dollars each month. One crude measure is to find the unexplained amount of money in the monthly or quarterly additions in foreign exchange reserves after accounting for the trade surplus and foreign direct investment and currency fluctuations.

But the 'water' seldom flows one way. In fact, the mainland is also surely but quietly witnessing massive outflows of capital, most of which flow into the developed countries and regions, US and Hong Kong among the top destinations.

Much has been written in the foreign media about the state-owned conglomerates splashing billions of US dollars on their overseas quests to secure energy supplies to sustain the mainland's buoyant growth.

But that is just one part of the outflow of the Chinese capital, which is only expected to grow bigger in the future, with far-reaching implications not only for the rest of the world but also for the mainland itself.

The mainland's government money aside, the outflows are fuelled in several ways: by richer mainlanders seeking more lucrative investment opportunities in overseas stock and property markets and better education for their children; by what is known as the third wave of outbound emigration in the history of the People's Republic; by corrupt officials laundering their ill-gotten money; and by private entrepreneurs stashing their hard-earned money in overseas bank accounts after losing confidence in the mainland's fickle regulatory regime.

Just as it is difficult to estimate the size of the inflows, it is equally impossible to accurately gauge the outflows, as most people prefer to stay under the radar because of the capital controls. But anecdotal evidence has shown that tens of thousands of mainlanders, if not millions, move billions of yuan overseas each year.

Of course, much of the money going overseas has been channelled through Hong Kong, the biggest beneficiary. Indeed, Hong Kong media is full of reports about mainland money bidding up prices of luxury commercial and residential properties and stock prices. There have also been more reports of mainlanders buying up multi-million US dollar properties in the desirable neighbourhoods in London, New York, and Sydney and in the vineyards in southern France. One growing trend is that rich mainlanders would buy homes in those foreign cities where their children study, with mothers going along to cook for them.

Tied to this trend is the third wave of emigrations by richer mainlanders. The first wave was in the 1970s, mainly in the form of illegal immigration to escape poverty, and the second wave was in the early 1990s, when mainly university students furthered their studies overseas.

This third wave, which has been accelerating in the past few years, has got some mainland observers worried because compared with the previous two waves, the mainland's best and elite are migrating to the United States, Canada and Europe, and they're taking with them not only their money but their skills to seek a better quality of life.

Corrupt officials fleeing the mainland with their ill-gotten gains overseas is nothing new. One popular estimate often cited by the state media is that over the past 30 years, more than 4,000 officials had fled with a combined total of US$50 billion. Many more corrupt ones have made preparations by sending their spouses and children abroad - they are known as 'naked officials'.

The trend is so evident that the central government has released specific measures aimed at strengthening oversight of those officials' activities and travel documents.

According to one theory, more corrupt officials and their business partners can be expected to step up efforts to move money overseas or get ready to bolt along with their money in the next two years - not necessarily because of a crackdown, but because of internal politics.

The Communist Party is undertaking a massive reshuffle of officials, which has already moved up from the county to provincial levels, and this will continue until late 2012, when the top leadership changes take place.

Different factions have long cited fighting corruption as they manoeuvre for advantage in the reshuffles, and those on the losing side or on the verge of retirement can lose the protection they once had and be easily subjected to anti-corruption investigations.

So, they prepare. Their motto: better to be safe than sorry.