Zhu Hexin: China to deepen capital account opening
Zhu Hexin, Deputy Governor of the People's Bank of China, outlined the country's strategy to deepen capital account opening. Speaking at the 2026 Lujiazui Forum, he discussed global capital flow trends and China's role.
Capital flows show resilience amid shifts
Global capital flows have evolved, displaying 'volatility, divergence, and resilience' since 2020.
Volatility increased due to pandemic shocks, geopolitical conflicts, and shifting interest rates, with cross-border capital increasingly allocated through bonds, equities, and funds.
Divergence deepened as capital concentrated in future-oriented industries like AI, semiconductors, and energy transition, while traditional sectors faced repricing pressures.
Despite challenges, global openness foundations remain solid; foreign direct investment (FDI) reached USD1.6 trillion in 2025, recovering to 2019 levels.
Net cross-border securities inflows exceeded USD4 trillion in 2025, a record high, demonstrating notable resilience.
Emerging markets, including China, have also enhanced their capacity to withstand external shocks through improved macroeconomic and macroprudential management.
China's two-way capital flows
China connects its innovation ecosystem, industrial capabilities, and financial services with the global economy through two-way cross-border capital flows.
Global innovation capital is increasingly deployed into China, shifting towards jointly building a 'Created in China' ecosystem.
In 2025, China's actual utilized foreign capital exceeded USD100 billion, with high-tech industries accounting for about one-third.
Concurrently, China provides patient capital to the world; outward direct investment accounted for 45 percent of outward investments in 2025.
The RMB's role as a financial link is expanding, with its share of cross-border capital account receipts and payments rising to about 60 percent, offering stable and predictable financial conditions.
Beyond channels: Institutional opening
China's push for 'four deepenings' signifies a sophisticated evolution in capital account opening, moving beyond mere channel access to a comprehensive institutional framework.
This approach prioritizes market entities and full-chain management, aligning with high-standard international rules for greater transparency and predictability.
The strategy aims to balance openness with bottom-line security, fostering a more robust and integrated financial system.