The Chinese authorities are considering a "Tobin tax" on financial transactions to deter speculative capital flows, said Guan Tao, head of the department of international payments at the State Administration of Foreign Exchange (SAFE). (A Tobin tax imposes a small charge on individual currency transactions to discourage excessive speculation.)

"If the renminbi (yuan) continues to be stable or rise slightly while yuan interest rates are higher than those of major currencies, financial operations of many companies could lead to more money inflows," he told a news conference.

"This will increase our foreign exchange reserves, given that we already have large reserves and investment returns from the reserves," he added.

Chinese banks posted a surplus of 1.68 trillion yuan ($277.61 billion) in their foreign exchange settlements in 2013, up 210 percent from the previous year, Guan said.

The central bank has said China's foreign exchange reserves, the world's largest, rose $157 billion in the fourth quarter to $3.82 trillion at end-2013.

Guan said the Fed's tapering of its quantitative easing programme on China's capital flows has so far been limited, but he cautioned that some money could leave emerging markets as the Fed pares its stimulus.

China's stable economic growth and large foreign exchange reserves will provide a cushion against possible capital flight caused by the Fed's QE tapering, he said.

The government has laid out plans to make the yuan convertible on the capital account, but it will also adopt measures to control potential risks from volatile money flows, Guan said.

"We will use more market-based means to manage (capital flows) and there are many tools that are under consideration, including a Tobin tax," he said.

Yi Gang, a vice central bank governor who is also head of the SAFE, wrote in an article earlier this month that China should study the so-called "Tobin tax" on financial dealings to curb hot money flows.

(Reporting By Kevin Yao; Editing by Eric Meijer)