China on Wednesday said it would continue to strengthen investigations of cases involving speculative money inflows and punish offenders, as analysts said such an influx could resurface in the second half of this year.

The government will "handle properly the investigation and punishment of cases relating to the crackdown on 'hot money' inflows and continue to maintain high pressure on speculative fund (inflows)", the State Administration of Foreign Exchange (SAFE) said in a statement on its website.

"After a temporary retreat in May and June, speculative funds could revisit China, possibly in the fourth quarter, due to shift in their risk appetite as the European situation stabilizes," said Zhang Ming, an economist at the Institute of World Economics and Politics under the Chinese Academy of Social Sciences. He said there were signs of speculative capital outflow in May and June as investors sought safe haven in dollar assets and China said it will make the currency more flexible, dampening further yuan appreciation expectations.

"The trend may have continued into July, but it could be reversed in the coming months."

The surge in speculative money inflows will be caused not by rising yuan appreciation expectations, but China's relatively low stock prices, he said. "It's obvious that the yuan's exchange rate has been more volatile and expectations for further revaluation are not very strong in the second half ."

On Wednesday, the yuan's 12-month non-deliverable forwards slid 0.07 percent to 6.6787 per dollar, reflecting bets the currency will strengthen 1.4 percent from the spot rate.

Apart from the specter of a weaker-than-expected US economic recovery, that is expected to dampen demand for China's exports, "people are getting used to the fact that China doesn't want rapid yuan appreciation," said Thio Chin Loo, a senior currency analyst at BNP Paribas SA in Singapore.

The SAFE also said in the statement that uncertainty remains regarding the domestic and global economic prospects, which could have complicated bearing on global flows of capital.

Speculative money enters and exits countries in search of swift profits, and is considered risky because it often departs at the first sign of weakness in an economy, immediately exacerbating investor confidence and making things worse.

China's year-on-year economic growth slowed in the second quarter to 10.3 percent from 11.9 percent in the January to March period.

Economists expect it to further slow in the second half of this year, although Yi Gang, vice-governor of the central bank, said recently that the overall growth could be more than 9 percent for the whole year.

SAFE also said the country is considering introducing new foreign exchange instruments to meet domestic market demand and will push forward "selective" capital account reforms without providing details.