(1) The herd effect of hot money will cause economic instability by affecting currency value. The large inflow of foreign hot money into the country is a bet on the appreciation of the RMB. The word "gamble" truly reflects the nature of hot money. From the overall background of economic operation, RMB appreciation is inevitable. But the key is how to improve it. If the RMB appreciates rapidly in a short period of time, foreign hot money will complete the conversion of foreign currency - RMB - foreign currency in a short period of time. In this process, assets denominated in foreign currencies will increase significantly. At the same time, foreign investment will increase significantly. A major outage will seriously affect the stability of the country's economy.

(2) The herd effect of hot money will disrupt the financial market and further affect the economic operation. Due to its short-term speculative nature, hot money often flows into highly speculative areas, such as the stock market and futures market. The nature of the virtual economy in these markets determines that their operation is prone to ups and downs. However, due to its close connection with the real economy, it will also have a great impact on the real economy. For example, although the direct consequence of the rapid decline of the stock market is the reduction of investor wealth, the resulting decline in market demand and the weakening of financing functions will ultimately be reflected in the operation of the real economy.

(3) The herd effect of hot money will disrupt the capital market - the operation of hot money will have a negative impact on people's investment behavior. Hot money often uses its relative advantages in scale to obtain higher returns in the short term through fast in and fast out. This operating style will have a demonstration effect on investors, especially new investors, and this demonstration effect will amplify the negative impact of hot money on the market.

(4) The economic herd effect will break the money supply required for healthy development to match the growth of the real economy. Hot money for the purpose of short-term speculation will seriously interfere with efforts to achieve the above conditions. Even Japan, which has a good property rights system, cannot bear the huge inflow and outflow of hot money, let alone the current China? The flow of hot money is mainly affected by the risks and returns of the financial market. It has poor stability and is expanding rapidly. It has an increasing impact on the operation of a country's financial market and even the national economy.