China's Cross-Border Capital Flows and Monetary Policy

This technical report from the People's Bank of China examines the characteristics and changes in the driving factors of China's cross-border capital flows and the corresponding monetary policy responses. It discusses the profound adjustments in the global economic and financial framework, highlighting the intensifying monetary policy divergence, geopolitical rivalries, and supply chain restructuring. The report outlines the latest trends in China's cross-border capital flows, including the current account surplus and the dynamics of the capital and financial account. It details the structural shifts in driving factors, emphasizing the role of market-based exchange rate reforms and the transition from single to multiple capital flow channels. The report also analyzes the impact of these changes on China's macroeconomic stability and their significance for global financial governance. The findings are supported by statistical data and trends observed in recent years, providing a comprehensive understanding of the evolving landscape of China's financial interactions with the global economy.