AI Data Insight
According to the latest data, China's Q4 2025 (annualized) capital and financial account recorded a net inflow of 25.856 billion RMB, completely reversing the massive outflow slump of over 3 trillion RMB from the previous period (Q4 2024). The end of foreign investors' reduction of Chinese asset holdings, combined with the return of portfolio funds driven by breakthroughs in high-tech industries, are the primary reasons for the account turning positive. In the short term, capital stabilization will significantly ease the depreciation pressure on the RMB, providing the PBOC with more ample room to cut the reserve requirement ratio (RRR) and interest rates.