After a trade surplus of over one trillion US dollars: China's capital export landscape gradually takes shape.

As China's manufacturing competitive advantages continue to expand, especially with growing competitiveness in semiconductor equipment, AI supply chains, high-end equipment, and new energy, China has maintained the world's largest trade surplus for many years, with the trade surplus last year exceeding one trillion dollars.

This also pushed China's current account surplus to a historical peak of approximately $735 billion last year.

However, the massive current account surplus is no longer reflected in the passive accumulation of official foreign exchange reserves, but instead is transformed into overseas asset allocation through the accumulation of net external assets by commercial banks, securities investments by the household sector through compliant channels, and enterprises expanding outward direct investment.

In 2025, China's non-reserve financial account deficit was about $782 billion, with securities investment outflows surging from $179 billion the previous year to $426 billion.

In response, as of May 2026, banks' cumulative net foreign exchange settlement for clients reached as high as $263.1 billion, yet the renminbi exchange rate has not faced one-way appreciation pressure—funds are flowing out again through more diversified channels such as Bond Connect Southbound, QDII expansion, and multinational corporate cash pools.

In addition, domestic real estate adjustments have led to a decline in traditional financing demand, consumer recovery remains relatively slow, corporate capital expenditure is more cautious, and the financial system still maintains a high savings rate. Since mid-2025, with the renminbi strengthening and exporters concentrated in settling foreign exchange, interbank market liquidity has been highly ample.

The persistent return of the huge trade surplus to the domestic market has exacerbated the asset shortage, pushing long-term interest rates and credit spreads to historical lows.

The continuous decline in financing costs, on the one hand, drives a structural leap from bank-dominated indirect financing to direct financing in the domestic market.

In 2025, direct financing such as bonds and equities accounted for 47% of new social financing, surpassing bank loans at 45% for the first time.

On the other hand, low-interest renminbi has thus further acquired the attributes of a carry trade and funding currency, with more and more emerging market enterprises, multinational corporations, and international financial institutions actively issuing renminbi bonds and using renminbi loans to replace dollar financing.

This also provides a structural window for domestic funds to go global, while giving the central bank stronger pricing influence in the offshore market.

As the balance of payments structure shifts from the traditional double surplus to a mirror model of "huge current account surplus + non-reserve financial account deficit," China is substantially transforming into a structural capital exporter, and the internationalization of the renminbi is also entering a new phase driven by capital exports and investment and financing, rather than trade settlement.

Capital exports are reshaping the logic of renminbi internationalization